Note 9 - Convertible Notes Payable | 12 Months Ended |
Jun. 30, 2014 |
Notes | ' |
Note 9 - Convertible Notes Payable | ' |
Note 9 – Convertible Notes Payable |
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| | June 30, | June 30, |
| | 2014 | 2013 |
Adar Bays Note #1 | 50,000 | - |
Adar Bays Note #2 | 150,000 | - |
Asher Note #2 | - | 20,500 |
Asher Note #3 | - | 32,500 |
Asher Note #4 | - | 37,500 |
Asher Note #5 | - | - |
Classic Capital Note #1 | 150,000 | - |
Classic Capital Note #2 | 50,000 | - |
Classic Capital Note #3 | 50,000 | - |
Coventry Note #1 | - | - |
Direct Capital Note #1 | - | - |
Direct Capital Note #2 | - | - |
Direct Capital Note #3 | 11,000 | - |
Direct Capital Note #4 | 11,000 | - |
Direct Capital Note #5 | 11,000 | - |
Direct Capital Note #6 | 46,215 | - |
Direct Capital Note #7 | 75,089 | - |
Direct Capital Note #8 | - | - |
Direct Capital Note #9 | - | - |
Direct Capital Note #10 | 16,000 | - |
Direct Capital Note #11 | 16,000 | - |
Direct Capital Note #12 | 16,000 | - |
Direct Capital Note #13 | 16,000 | - |
Direct Capital Note #14 | 48,000 | - |
Direct Capital Note #15 | 71,237 | - |
Gel Properties Note #1 | - | 30,000 |
Gel Properties Note #2 | - | - |
Gel Properties Note #3 | 60,600 | - |
JMJ Note #1 | 33,300 | - |
JMJ Note #2 | 83,250 | - |
KBM Worldwide Note #1 | 37,500 | - |
LG Capital Note #1 | 30,000 | - |
LG Capital Note #2 | - | - |
LG Capital Note #3 | 27,000 | - |
LG Capital Note #4 | 40,000 | - |
New Venture Note #1 | 50,000 | - |
Prolific Note #1 | 20,000 | - |
Union Capital Note #1 | 28,516 | - |
Union Capital Note #2 | 97,000 | - |
| | $ 1,294,708 | $ 120,500 |
| Debt discount | (263,546) | (16,400) |
| Accrued interest | 62,404 | 3,085 |
| | $ 1,093,566 | $ 107,185 |
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Adar Bays, LLC Note #1 |
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On May 19, 2014, the Company issued a convertible promissory note to Adar Bays, LLC. Under the terms of the note, the Company has borrowed a total of $50,000 from Adar Bays, LLC, which accrues interest at an annual rate of 8% and has a maturity date of May 19, 2015. The note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $460 (year ended June 30, 2013 - $0) in interest expense. |
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After 180 days from issuance, the note may be converted at the option of the holder into common stock of the Company. The conversion price is 60% of the market price, where market price is defined as “the lowest closing bid price on the OTCBB for the ten prior trading days including the day upon which a Notice of Conversion is received by the Company.” |
As of June 30, 2014, principal balance of $50,000 (June 30, 2013 - $0), accrued interest of $460 (June 30, 2013 - $0), debt discount of $0 (June 30, 2013 - $0) and a derivative liability of $0 (June 30, 2013 - $0) was recorded. |
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Adar Bays, LLC Note #2 |
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On May 27, 2014, the Company issued a convertible promissory note to Adar Bays, LLC. Under the terms of the note, the Company has borrowed a total of $150,000 from Adar Bays, LLC, which accrues interest at an annual rate of 8% and has a maturity date of May 27, 2015. The note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $1,118 (year ended June 30, 2013 - $0) in interest expense. |
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After 180 days from issuance, the note may be converted at the option of the holder into common stock of the Company. The conversion price is 60% of the market price, where market price is defined as “the lowest closing bid price on the OTCBB for the ten prior trading days including the day upon which a Notice of Conversion is received by the Company.” |
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As of June 30, 2014, principal balance of $150,000 (June 30, 2013 - $0), accrued interest of $1,118 (June 30, 2013 - $0), debt discount of $0 (June 30, 2013 - $0) and a derivative liability of $0 (June 30, 2013 - $0) was recorded. |
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Asher Note #2 |
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On December 12, 2012, the Company executed an Unsecured Promissory Note (the “Asher Note”) to Asher Enterprises, Inc. (“Asher”). Under the terms of the Asher Note, the Company has borrowed a total of $32,500 from Asher, which accrues interest at an annual rate of 8% and has a maturity date of September 14, 2013. The Asher Note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $0 (year ended June 30, 2013 - $1,341) in interest expense. |
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Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $99,348 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. |
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During the year ended June 30, 2014, the Company recorded a gain of $68,008 (year ended June 30, 2013 - $0) due to the change in value of the derivative liability during the period, and debt discount of $16,400 (year ended June 30, 2013 - $16,100) was accreted to the statement of operations. |
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During the year ended June 30, 2014, the Company issued 12,871,237 common shares upon the conversion of $20,500 of the principal balance and $1,300 interest, and $31,340 of the derivative liability was re-classified as additional paid in capital upon conversion. |
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As of June 30, 2014, principal balance of $0 (June 30, 2013 – $20,500), accrued interest of $0 (June 30, 2013 - $1,341), debt discount of $0 (June 30, 2013 - $16,400) and a derivative liability of $0 (June 30, 2013 - $99,348) was recorded. |
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Asher Note #3 |
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On January 30, 2013, the Company executed an Unsecured Promissory Note (the “Asher Note”) to Asher Enterprises, Inc. (“Asher”). Under the terms of the Asher Note, the Company has borrowed a total of $32,500 from Asher, which accrues interest at an annual rate of 8% and has a maturity date of November 1, 2013. The Asher Note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $224 (year ended June 30, 2013 - $1,076) in interest expense. |
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Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $48,237 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. |
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During the year ended June 30, 2014, the Company recorded a loss of $33,554 (year ended June 30, 2013 - $0) due to the change in value of the derivative liability during the period, and debt discount of $32,500 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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During the year ended June 30, 2014, the Company issued 57,091,170 common shares upon the conversion of $32,500 of the principal balance and $1,300 in interest, and $81,791 of the derivative liability was re-classified as additional paid in capital upon conversion. |
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As of June 30, 2014, principal balance of $0 (June 30, 2013 - $32,500), accrued interest of $0 (June 30, 2013 - $1,076), debt discount of $0 (June 30, 2013 - $0) and a derivative liability of $0 (June 30, 2013 - $0) was recorded. |
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Asher Note #4 |
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On April 12, 2013, the Company executed an Unsecured Promissory Note (the “Asher Note”) to Asher Enterprises, Inc. (“Asher”). Under the terms of the Asher Note, the Company has borrowed a total of $37,500 from Asher, which accrues interest at an annual rate of 8% and has a maturity date of January 16, 2014. The Asher Note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $842 (year ended June 30, 2013 - $658) in interest expense. |
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Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $50,735 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. |
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During the year ended June 30, 2014, the Company recorded a gain of $10,696 (year ended June 30, 2013 - $0) due to the change in value of the derivative liability during the period, and debt discount of $37,500 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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During the year ended June 30, 2014, the Company issued 63,661,604 common shares upon the conversion of $37,500 of the principal balance and $1,500 in interest, and $40,039 of the derivative liability was re-classified as additional paid in capital upon conversion. |
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As of June 30, 2014, principal balance of $0 (June 30, 2013 - $37,500), accrued interest of $0 (June 30, 2013 - $658), debt discount of $0 (June 30, 2013 - $0) and a derivative liability of $0 (June 30, 2013 - $0) was recorded. |
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Asher Note #5 |
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On October 4, 2013, the Company executed an Unsecured Promissory Note (the “Asher Note”) to Asher Enterprises, Inc. (“Asher”). Under the terms of the Asher Note, the Company has borrowed a total of $21,135 from Asher, which accrues interest at an annual rate of 8% and has a maturity date of July 8, 2014. The Asher Note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $845 (year ended June 30, 2013 - $0) in interest expense. |
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Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $159,301 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. |
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During the year ended June 30, 2014, the Company recorded a loss of $44,351 (year ended June 30, 2013 - $0) due to the change in value of the derivative liability during the period, and debt discount of $21,135 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
During the year ended June 30, 2014, the Company issued 25,059,567 common shares upon the conversion of $21,135 of the principal balance and $845 in interest, and $203,652 of the derivative liability was re-classified as additional paid in capital upon conversion. |
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As of June 30, 2014, principal balance of $0 (June 30, 2013 - $0), accrued interest of $0 (June 30, 2013 - $0), debt discount of $0 (June 30, 2013 - $0) and a derivative liability of $0 (June 30, 2013 - $0) was recorded. |
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Classic Capital Note #1 |
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On May 5, 2014, the Company issued a convertible promissory note to Classic Capital Inc. Under the terms of the note, the Company has borrowed a total of $150,000 from Classic Capital Inc., which accrues interest at an annual rate of 8% and has a maturity date of May 5, 2015. The note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $1,841 (year ended June 30, 2013 - $0) in interest expense. |
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After 180 days from issuance, the note may be converted at the option of the holder into common stock of the Company. The conversion price is 70% of the market price, where market price is defined as “the lowest closing bid price on the OTCBB for any of the fifteen trading days including the day upon which a Notice of Conversion is received by the Company.” |
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As of June 30, 2014, principal balance of $150,000 (June 30, 2013 - $0), accrued interest of $1,841 (June 30, 2013 - $0), debt discount of $0 (June 30, 2013 - $0) and a derivative liability of $0 (June 30, 2013 - $0) was recorded. |
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Classic Capital Note #2 |
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On May 31, 2014, the Company issued a convertible promissory note to Classic Capital Inc. Under the terms of the note, the Company has borrowed a total of $50,000 from Classic Capital Inc., which accrues interest at an annual rate of 8% and has a maturity date of May 31, 2015. The note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $329 (year ended June 30, 2013 - $0) in interest expense. |
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After 180 days from issuance, the note may be converted at the option of the holder into common stock of the Company. The conversion price is 70% of the market price, where market price is defined as “the lowest closing bid price on the OTCBB for any of the fifteen trading days including the day upon which a Notice of Conversion is received by the Company.” |
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As of June 30, 2014, principal balance of $50,000 (June 30, 2013 - $0), accrued interest of $329 (June 30, 2013 - $0), debt discount of $0 (June 30, 2013 - $0) and a derivative liability of $0 (June 30, 2013 - $0) was recorded. |
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Classic Capital Note #3 |
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On June 30, 2014, the Company issued a convertible promissory note to Classic Capital Inc. Under the terms of the note, the Company has borrowed a total of $50,000 from Classic Capital Inc., which accrues interest at an annual rate of 8% and has a maturity date of June 30, 2015. The note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $0 (year ended June 30, 2013 - $0) in interest expense. |
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After 180 days from issuance, the note may be converted at the option of the holder into common stock of the Company. The conversion price is 70% of the market price, where market price is defined as “the lowest closing bid price on the OTCBB for any of the fifteen trading days including the day upon which a Notice of Conversion is received by the Company.” |
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As of June 30, 2014, principal balance of $50,000 (June 30, 2013 - $0), accrued interest of $0 (June 30, 2013 - $0), debt discount of $0 (June 30, 2013 - $0) and a derivative liability of $0 (June 30, 2013 - $0) was recorded. |
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Coventry Enterprises Note #1 |
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On January 31, 2014, the Company arranged a debt swap under which a Direct Capital note for $50,000 was transferred to Coventry Enterprises, LLC. The promissory note is unsecured, bears interest at 6% per annum and matures on January 31, 2015. The note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $0 (year ended June 30, 2013 - $0) in interest expense. |
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Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $171,962 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. |
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During the year ended June 30, 2014, the Company recorded a gain of $117,103 (year ended June 30, 2013 - $0) due to the change in value of the derivative liability during the period, and debt discount of $50,000 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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During the year ended June 30, 2014, the Company issued 92,556,773 common shares upon the conversion of $50,000 of the principal balance and $54,859 of the derivative liability was re-classified as additional paid in capital upon conversion. |
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As of June 30, 2014, principal balance of $0 (June 30, 2013 - $0), accrued interest of $0 (June 30, 2013 - $0), debt discount of $0 (June 30, 2013 - $0) and a derivative liability of $0 (June 30, 2013 - $0) was recorded. |
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Direct Capital Group Note #1 |
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On December 15, 2012 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $70,267. The promissory note is unsecured, bears interest at 6% per annum, and matures on June 15, 2013. Any principal amount not paid by the maturity date bears interest at 12% per annum. The note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $2,403 (year ended June 30, 2013 - $0) in interest expense. |
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On June 28, 2013, the Company transferred the note balance of $70,267 to Gel Properties, LLC. |
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As of June 30, 2014, principal balance of $0 (June 30, 2013 - $0), accrued interest of $2,403 (June 30, 2013 - $0) and debt discount of $0 (June 30, 2013 - $0) was recorded. |
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Direct Capital Group Note #2 |
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On December 31, 2012, the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $165,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on December 31, 2012. Any principal amount not paid by the maturity date bears interest at 22% per annum. The note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $47,664 (year ended June 30, 2013 - $0) in interest expense. |
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On May 24, 2013, the Company issued one share of preferred stock to settle debt of $165,000. This certificate has been canceled and the remaining value of the note was reinstated. |
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On February 26, 2014, the Company transferred $60,000 of the note to LG Capital Funding, LLC. On May 27, 2014, the Company transferred $75,000 of the note to Gel Properties, LLC. On May 27, 2014, the Company transferred $30,000 in principal and $18,516 in interest of the note for a total of $48,516 to Union Capital, LLC. |
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As of June 30, 2014, principal balance of $0 (June 30, 2013 - $0), accrued interest of $29,148 (June 30, 2013 - $0) and debt discount of $0 (June 30, 2013 - $0) was recorded. |
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Direct Capital Group Note #3 |
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On July 31, 2013 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $11,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on February 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the year ended June 30, 2014, the Company accrued $1,429 (June 30, 2013 - $0) in interest expense. |
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A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance. |
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During the year ended June 30, 2014 interest expense relating to the beneficial conversion feature of this convertible note of $11,000 (June 30, 2013 - $0) was recorded in the financial statements, with a corresponding increase to additional paid in capital and debt discount of $11,000 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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As of June 30, 2014, principal balance of $11,000 (June 30, 2013 - $0), accrued interest of $1,429 (June 30, 2013 - $0) and debt discount of $0 (June 30, 2013 - $0) was recorded. |
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Direct Capital Group Note #4 |
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On August 31, 2013 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $11,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on March 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the year ended June 30, 2014, the Company accrued $1,236 (June 30, 2013 - $0) in interest expense. |
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A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance. |
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During the year ended June 30, 2014 interest expense relating to the beneficial conversion feature of this convertible note of $11,000 (June 30, 2013 - $0) was recorded in the financial statements, with a corresponding increase to additional paid in capital and debt discount of $11,000 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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As of June 30, 2014, principal balance of $11,000 (June 30, 2013 - $0), accrued interest of $1.236 (June 30, 2013 - $0) and debt discount of $0 (June 30, 2013 - $0) was recorded. |
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Direct Capital Group Note #5 |
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On September 30, 2013 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $11,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the year ended June 30, 2014, the Company accrued $1,031 (June 30, 2013 - $0) in interest expense. |
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A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance. |
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During the year ended June 30, 2014 interest expense relating to the beneficial conversion feature of this convertible note of $11,000 (June 30, 2013 - $0) was recorded in the financial statements, with a corresponding increase to additional paid in capital and debt discount of $11,000 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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As of June 30, 2014, principal balance of $11,000 (June 30, 2013 - $0), accrued interest of $1,031 (June 30, 2013 - $0) and debt discount of $0 (June 30, 2013 - $0) was recorded. |
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Direct Capital Group Note #6 |
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On September 30, 2013 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $46,215. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the year ended June 30, 2014, the Company accrued $4,330 (June 30, 2013 - $0) in interest expense. |
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A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance. |
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During the year ended June 30, 2014 interest expense relating to the beneficial conversion feature of this convertible note of $46,215 (June 30, 2013 - $0) was recorded in the financial statements, with a corresponding increase to additional paid in capital and debt discount of $46,215 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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As of June 30, 2014, principal balance of $46,215 (June 30, 2013 - $0), accrued interest of $4,330 (June 30, 2013 - $0) and debt discount of $0 (June 30, 2013 - $0) was recorded. |
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Direct Capital Group Note #7 |
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On October 11, 2013, the Company arranged a debt swap whereas Direct Capital Group acquired the debt from a former related party in the amount $190,084. The promissory note is unsecured, bears interest at 6% per annum. During the year ending June 30, 2014, the Company accrued $5,528 (year ended June 30, 2013 - $0) in interest expense. |
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Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $218,091 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. |
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During the year ended June 30, 2014, the Company recorded a gain of $46,708 (year ended June 30, 2013 - $0) due to the change in value of the derivative liability during the period, and debt discount of $190,084 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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On January 31, 2014, the Company transferred $50,000 of the note to Coventry Enterprises, LLC and $25,000 of the note to Prolific Group, LLC. |
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During the year ended June 30, 2014, the Company issued 64,274,468 common shares upon the conversion of $39,995 of the principal balance and $84,116 of the derivative liability was re-classified as additional paid in capital upon conversion. |
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As of June 30, 2014, principal balance of $75,089 (June 30, 2013 - $0), accrued interest of $5,528 (June 30, 2013 - $0), debt discount of $0 (June 30, 2013 - $0) and a derivative liability of $87,268 (June 30, 2013 - $0) was recorded. |
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Direct Capital Group Note #8 |
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On October 31, 2013 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on May 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the year ended June 30, 2014, the Company accrued $1,040 (June 30, 2013 - $0) in interest expense. |
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A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance. |
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During the year ended June 30, 2014 interest expense relating to the beneficial conversion feature of this convertible note of $16,000 (June 30, 2013 - $0) was recorded in the financial statements, with a corresponding increase to additional paid in capital and debt discount of $16,000 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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On June 12, 2013, the Company transferred the note balance of $16,000 to LG Capital Funding, LLC. |
As of June 30, 2014, principal balance of $0 (June 30, 2013 - $0), accrued interest of $1,040 (June 30, 2013 - $0) and debt discount of $0 (June 30, 2013 - $0) was recorded. |
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Direct Capital Group Note #9 |
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On November 30, 2013 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on June 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the year ended June 30, 2014, the Company accrued $745 (June 30, 2013 - $0) in interest expense. |
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A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance. |
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During the year ended June 30, 2014 interest expense relating to the beneficial conversion feature of this convertible note of $16,000 (June 30, 2013 - $0) was recorded in the financial statements, with a corresponding increase to additional paid in capital and debt discount of $16,000 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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On June 12, 2013, the Company transferred the note balance of $16,000 to LG Capital Funding, LLC. |
As of June 30, 2014, principal balance of $0 (June 30, 2013 - $0), accrued interest of $745 (June 30, 2013 - $0) and debt discount of $0 (June 30, 2013 - $0) was recorded. |
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Direct Capital Group Note #10 |
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On December 31, 2013 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the year ended June 30, 2014, the Company accrued $631 (June 30, 2013 - $0) in interest expense. |
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A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance. |
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During the year ended June 30, 2014 interest expense relating to the beneficial conversion feature of this convertible note of $16,000 (June 30, 2013 - $0) was recorded in the financial statements, with a corresponding increase to additional paid in capital and debt discount of $15,956 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
As of June 30, 2014, principal balance of $16,000 (June 30, 2013 - $0), accrued interest of $631 (June 30, 2013 - $0) and debt discount of $44 (June 30, 2013 - $0) was recorded. |
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Direct Capital Group Note #11 |
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On January 31, 2014 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on August 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the year ended June 30, 2014, the Company accrued $526 (June 30, 2013 - $0) in interest expense. |
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A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance. |
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During the year ended June 30, 2014 interest expense relating to the beneficial conversion feature of this convertible note of $16,000 (June 30, 2013 - $0) was recorded in the financial statements, with a corresponding increase to additional paid in capital and debt discount of $14,099 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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As of June 30, 2014, principal balance of $16,000 (June 30, 2013 - $0), accrued interest of $526 (June 30, 2013 - $0) and debt discount of $1,901 (June 30, 2013 - $0) was recorded. |
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Direct Capital Group Note #12 |
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On February 28, 2014 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on September 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the year ended June 30, 2014, the Company accrued $428 (June 30, 2013 - $0) in interest expense. |
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A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance. |
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During the year ended June 30, 2014 interest expense relating to the beneficial conversion feature of this convertible note of $16,000 (June 30, 2013 - $0) was recorded in the financial statements, with a corresponding increase to additional paid in capital and debt discount of $11,464 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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As of June 30, 2014, principal balance of $16,000 (June 30, 2013 - $0), accrued interest of $428 (June 30, 2013 - $0) and debt discount of $4,536 (June 30, 2013 - $0) was recorded. |
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Direct Capital Group Note #13 |
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On March 31, 2014 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on October 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the year ended June 30, 2014, the Company accrued $319 (June 30, 2013 - $0) in interest expense. |
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A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance. |
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During the year ended June 30, 2014 interest expense relating to the beneficial conversion feature of this convertible note of $16,000 (June 30, 2013 - $0) was recorded in the financial statements, with a corresponding increase to additional paid in capital and debt discount of $7,913 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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As of June 30, 2014, principal balance of $16,000 (June 30, 2013 - $0), accrued interest of $319 (June 30, 2013 - $0) and debt discount of $8,087 (June 30, 2013 - $0) was recorded. |
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Direct Capital Group Note #14 |
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On April 30, 2014 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $48,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on November 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the year ended June 30, 2014, the Company accrued $642 (June 30, 2013 - $0) in interest expense. |
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A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance. |
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During the year ended June 30, 2014 interest expense relating to the beneficial conversion feature of this convertible note of $48,000 (June 30, 2013 - $0) was recorded in the financial statements, with a corresponding increase to additional paid in capital and debt discount of $15,827 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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As of June 30, 2014, principal balance of $48,000 (June 30, 2013 - $0), accrued interest of $642 (June 30, 2013 - $0) and debt discount of $32,173 (June 30, 2013 - $0) was recorded. |
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Direct Capital Group Note #15 |
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On June 1, 2014 the Company entered into a Promissory Note with Direct Capital Group in the sum of $71,237. The promissory note is unsecured, bears interest at 8% per annum, and is due on demand or in increments. |
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During the year ended June 30, 2014, the Company accrued $453 (June 30, 2013 - $0) in interest expense. |
As of June 30, 2014, principal balance of $71,237 (June 30, 2013 - $0) and accrued interest of $453 (June 30, 2013 - $0) was recorded. |
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Gel Properties Note #1 |
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On June 28, 2013, the Company issued a convertible promissory note to Gel Properties, LLC. Under the terms of the note, the Company has borrowed a total of $30,000 from Gel Properties, LLC, which accrues interest at an annual rate of 6% and has a maturity date of June 28, 2014. The note also contains customary events of default. |
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During the year ended June 30, 2014, the Company accrued $1,543 (year ended June 30, 2013 - $10) in interest expense. |
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Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $33,641 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. |
During the year ended June 30, 2014, the Company recorded a loss of $29,779 (year ended June 30, 2013 - $0) due to the change in value of the derivative liability during the period, and debt discount of $30,000 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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During the year ended June 30, 2014, the Company issued 28,453,891 common shares upon the conversion of $30,000 of the principal balance and $1,553 of interest, and $63,420 of the derivative liability was re-classified as additional paid in capital upon conversion. |
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As of June 30, 2014, principal balance of $0 (June 30, 2013 - $30,000), accrued interest of $0 (June 30, 2013 - $10), debt discount of $0 (June 30, 2013 - $0) and a derivative liability of $0 (June 30, 2013 - $0) was recorded. |
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Gel Properties Note #2 |
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On June 28, 2013, the Company arranged a debt swap under which a Direct Capital note for $70,267 was transferred to Gel Properties, LLC. The promissory note is unsecured, bears interest at 6% per annum and matures on June 28, 2014. The note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $2,869 (year ended June 30, 2013 - $0) in interest expense. |
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Upon the holder’s option to convert becoming active, the Company recorded a debt discount and derivative liability of $75,173, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. |
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During the year ended June 30, 2014, the Company recorded a loss of $51,380 (year ended June 30, 2013 - $0) due to the change in value of the derivative liability during the period, and debt discount of $70,267 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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During the year ended June 30, 2014, the Company issued 157,829,310 common shares upon the conversion of $70,267 of the principal balance and $2,869 of interest, and $126,553 of the derivative liability was re-classified as additional paid in capital upon conversion. |
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As of June 30, 2014, principal balance of $0 (June 30, 2013 - $0), accrued interest of $0 (June 30, 2013 - $0), debt discount of $0 (June 30, 2013 - $0) and a derivative liability of $0 (June 30, 2013 - $0) was recorded. |
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Gel Properties Note #3 |
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On May 27, 2014, the Company arranged a debt swap under which a Direct Capital note for $75,000 was transferred to Gel Properties, LLC. The promissory note is unsecured, bears interest at 6% per annum and matures on May 27, 2015. The note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $511 (year ended June 30, 2013 - $0) in interest expense. |
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Upon the holder’s option to convert becoming active, the Company recorded a debt discount and derivative liability of $161,019, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. |
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During the year ended June 30, 2014, the Company recorded a gain of $60,495 (year ended June 30, 2013 - $0) due to the change in value of the derivative liability during the period, and debt discount of $20,045 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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During the year ended June 30, 2014, the Company issued 20,166,667 common shares upon the conversion of $14,400 of the principal balance, and $23,134 of the derivative liability was re-classified as additional paid in capital upon conversion. |
As of June 30, 2014, principal balance of $60,600 (June 30, 2013 - $0), accrued interest of $511 (June 30, 2013 - $0), debt discount of $54,955 (June 30, 2013 - $0) and a derivative liability of $77,390 (June 30, 2013 - $0) was recorded. |
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JMJ Financial Note #1 |
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On July 18, 2013, the Company issued a convertible promissory note to JMJ Financial, LLC. Under the terms of the note, the Company borrowed $27,750 on July18, 2013 and $33,300 on February 20, 2014 for a total of $61,050 from JMJ Financial. In the event the Company does not repay note on or within 90 days of the date the funds were distributed, a one-time interest charge of 12% will be applied to the principal balance. The note has a maturity date of July 18, 2014 for the first payment and February 20, 2015 for the second payment. The note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $7,326 (year ended June 30, 2013 - $0) in interest expense. |
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Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $76,527 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. |
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During the year ended June 30, 2014, the Company recorded a loss of $11,071 (year ended June 30, 2013 - $0) due to the change in value of the derivative liability during the period, and debt discount of $39,610 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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During the year ended June 30, 2014, the Company issued 86,600,000 common shares upon the conversion of $27,750 of the principal balance and $3,300 of interest, and $42,569 of the derivative liability was re-classified as additional paid in capital upon conversion. |
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As of June 30, 2014, principal balance of $33,300 (June 30, 2013 - $0), accrued interest of $3,996 (June 30, 2013 - $0), debt discount of $21,440 (June 30, 2013 - $0) and a derivative liability of $45,029 (June 30, 2013 - $0) was recorded. |
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JMJ Financial Note #2 |
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On April 16, 2014, the Company issued a convertible promissory note to JMJ Financial, LLC. Under the terms of the note, the Company borrowed $49,950 on April 16, 2014 and $33,300 on June 23, 2014 for a total of $83,250 from JMJ Financial. In the event the Company does not repay note on or within 90 days of the date the funds were distributed, a one-time interest charge of 12% will be applied to the principal balance. The note has a maturity date of April 16, 2015 for the first payment and June 23, 2015 for the second payment. The note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $0 (year ended June 30, 2013 - $0) in interest expense. |
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Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $414,278 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. |
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During the year ended June 30, 2014, the Company recorded a gain of $301,708 (year ended June 30, 2013 - $0) due to the change in value of the derivative liability during the period, and debt discount of $10,903 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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As of June 30, 2014, principal balance of $83,250 (June 30, 2013 - $0), accrued interest of $0 (June 30, 2013 - $0), debt discount of $72,347 (June 30, 2013 - $0) and a derivative liability of $112,570 (June 30, 2013 - $0) was recorded. |
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KBM Worldwide Note #1 |
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On April 11, 2014, the Company issued a convertible promissory note to KBM Worldwide, Inc. Under the terms of the note, the Company has borrowed a total of $37,500 from KBM Worldwide, Inc., which accrues interest at an annual rate of 8% and has a maturity date of January 15, 2015. The note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $658 (year ended June 30, 2013 - $0) in interest expense. |
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After 180 days from issuance, the note may be converted at the option of the holder into common stock of the Company. The conversion price is 58% of the market price, where market price is defined as “the average of the lowest three trading prices during the ten trading days prior to the conversion date.” |
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As of June 30, 2014, principal balance of $37,500 (June 30, 2013 - $0), accrued interest of $658 (June 30, 2013 - $0), debt discount of $0 (June 30, 2013 - $0) and a derivative liability of $0 (June 30, 2013 - $0) was recorded. |
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LG Capital Note #1 |
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On February 26, 2014, the Company executed an Unsecured Promissory Note to LG Capital Funding, LLC. Under the terms of the note, the Company has borrowed a total of $30,000, which accrues interest at an annual rate of 8% and has a maturity date of February 26, 2015. The note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $815 (year ended June 30, 2013 - $0) in interest expense. |
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After 180 days from issuance, the note may be converted at the option of the holder into common stock of the Company. The conversion price is 55% of the market price, where market price is defined as “the lowest closing bid price on the OTCBB for the fifteen prior trading days including the day upon which a Notice of Conversion is received by the Company.” |
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As of June 30, 2014, principal balance of $30,000 (June 30, 2013 - $0), accrued interest of $815 (June 30, 2013 - $0), debt discount of $0 (June 30, 2013 - $0) and a derivative liability of $0 (June 30, 2013 - $0) was recorded. |
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LG Capital Note #2 |
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On February 26, 2014, the Company arranged a debt swap under which a Direct Capital note for $60,000 was transferred to LG Capital Funding, LLC. The promissory note is unsecured, bears interest at 8% per annum and matures on February 26, 2015. The note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $476 (year ended June 30, 2013 - $0) in interest expense. |
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Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $90,113 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. |
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During the year ended June 30, 2014, the Company recorded a loss of $336,716 (year ended June 30, 2013 - $0) due to the change in value of the derivative liability during the period, and debt discount of $60,000 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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During the year ended June 30, 2014, the Company issued 209,177,486 common shares upon the conversion of $60,000 of the principal balance and $476 in interest, and $426,828 of the derivative liability was re-classified as additional paid in capital upon conversion. |
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As of June 30, 2014, principal balance of $0 (June 30, 2013 - $0), accrued interest of $0 (June 30, 2013 - $0), debt discount of $0 (June 30, 2013 - $0) and a derivative liability of $0 (June 30, 2013 - $0) was recorded. |
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LG Capital Note #3 |
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On June 12, 2014, the Company arranged a debt swap under which two Direct Capital notes for $16,000 each was transferred to LG Capital Funding, LLC for a total amount of $32,000. The promissory note is unsecured, bears interest at 8% per annum and matures on June 12, 2015. The note also contains customary events of default. |
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During the year ended June 30, 2014, the Company accrued $121 (year ended June 30, 2013 - $0) in interest expense. |
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Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $53,930 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. |
During the year ended June 30, 2014, the Company recorded a gain of $7,782 (year ended June 30, 2013 - $0) due to the change in value of the derivative liability during the period, and debt discount of $1,578 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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During the year ended June 30, 2014, the Company issued 4,558,405 common shares upon the conversion of $5,000 of the principal balance and $14 in interest, and $7,973 of the derivative liability was re-classified as additional paid in capital upon conversion. |
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As of June 30, 2014, principal balance of $27,000 (June 30, 2013 - $0), accrued interest of $107 (June 30, 2013 - $0), debt discount of $30,422 (June 30, 2013 - $0) and a derivative liability of $38,176 (June 30, 2013 - $0) was recorded. |
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LG Capital Note #4 |
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On June 12, 2014, the Company executed an Unsecured Promissory Note to LG Capital Funding, LLC. Under the terms of the note, the Company has borrowed a total of $40,000, which accrues interest at an annual rate of 8% and has a maturity date of June 12, 2015. The note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $158 (year ended June 30, 2013 - $0) in interest expense. |
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After 180 days from issuance, the note may be converted at the option of the holder into common stock of the Company. The conversion price is 55% of the market price, where market price is defined as “the lowest closing bid price on the OTCBB for the ten prior trading days including the day upon which a Notice of Conversion is received by the Company.” |
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As of June 30, 2014, principal balance of $40,000 (June 30, 2013 - $0), accrued interest of $158 (June 30, 2013 - $0), debt discount of $0 (June 30, 2013 - $0) and a derivative liability of $0 (June 30, 2013 - $0) was recorded. |
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New Venture Attorneys Note #1 |
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On April 1, 2014, the Company executed an Unsecured Promissory Note to New Venture Attorneys PC. Under the terms of the note, the Company has borrowed a total of $50,000, which accrues interest at an annual rate of 8% and has a maturity date of April 1, 2015. The note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $986 (year ended June 30, 2013 - $0) in interest expense. |
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After 180 days from issuance, the note may be converted at the option of the holder into common stock of the Company. The conversion price is 55% of the market price, where market price is defined as “the lowest closing bid price on the OTCBB for the ten prior trading days including the day upon which a Notice of Conversion is received by the Company.” |
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As of June 30, 2014, principal balance of $50,000 (June 30, 2013 - $0), accrued interest of $986 (June 30, 2013 - $0), debt discount of $0 (June 30, 2013 - $0) and a derivative liability of $0 (June 30, 2013 - $0) was recorded. |
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Prolific Group Note #1 |
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On January 31, 2014, the Company arranged a debt swap under which a Direct Capital note for $25,000 was transferred to Prolific Group, LLC. The promissory note is unsecured, bears interest at 6% per annum and matures on January 31, 2015. The note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $535 (year ended June 30, 2013 - $0) in interest expense. |
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Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $85,981 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. |
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During the year ended June 30, 2014, the Company recorded a gain of $39,842 (year ended June 30, 2013 - $0) due to the change in value of the derivative liability during the period, and debt discount of $13,219 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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During the year ended June 30, 2014, the Company issued 55,550,836 common shares upon the conversion of $5,000 of the principal balance and $22,895 of the derivative liability was re-classified as additional paid in capital upon conversion. |
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As of June 30, 2014, principal balance of $20,000 (June 30, 2013 - $0), accrued interest of $535 (June 30, 2013 - $0), debt discount of $11,781 (June 30, 2013 - $0) and a derivative liability of $23,245 (June 30, 2013 - $0) was recorded. |
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Union Capital Note #1 |
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On May 27, 2014, the Company arranged a debt swap under which a Direct Capital note for $48,516 was transferred to Union Capital, LLC. The promissory note is unsecured, bears interest at 8% per annum and matures on May 27, 2015. The note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $280 (year ended June 30, 2013 - $0) in interest expense. |
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Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $104,160 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. |
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During the year ended June 30, 2014, the Company recorded a gain of $37,154 (year ended June 30, 2013 - $0) due to the change in value of the derivative liability during the period, and debt discount of $22,656 (year ended June 30, 2013 - $0) was accreted to the statement of operations. |
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During the year ended June 30, 2014, the Company issued 20,000,000 common shares upon the conversion of $20,000 of the principal balance and $30,590 of the derivative liability was re-classified as additional paid in capital upon conversion. |
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As of June 30, 2014, principal balance of $28,516 (June 30, 2013 - $0), accrued interest of $280 (June 30, 2013 - $0), debt discount of $25,860 (June 30, 2013 - $0) and a derivative liability of $36,417 (June 30, 2013 - $0) was recorded. |
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Union Capital Note #2 |
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On May 27, 2014, the Company executed an Unsecured Promissory Note to Union Capital, LLC. Under the terms of the note, the Company has borrowed a total of $97,000, which accrues interest at an annual rate of 8% and has a maturity date of May 27, 2015. The note also contains customary events of default. During the year ended June 30, 2014, the Company accrued $723 (year ended June 30, 2013 - $0) in interest expense. |
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After 180 days from issuance, the note may be converted at the option of the holder into common stock of the Company. The conversion price is 60% of the market price, where market price is defined as “the lowest closing bid price on the OTCBB for the ten prior trading days including the day upon which a Notice of Conversion is received by the Company.” |
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As of June 30, 2014, principal balance of $97,000 (June 30, 2013 - $0), accrued interest of $723 (June 30, 2013 - $0), debt discount of $0 (June 30, 2013 - $0) and a derivative liability of $0 (June 30, 2013 - $0) was recorded. |
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Note 10 – Derivative Liabilities |
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The Company issued financial instruments in the form of convertible notes with embedded conversion features. The convertible notes payable have conversion rates which are indexed to the market value of the Company’s common stock price. |
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During the year ending June 30, 2014, $434,047 of convertible notes payable were converted into common stock of the Company. |
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These derivative liabilities have been measured in accordance with fair value measurements, as defined by GAAP. The valuation assumptions are classified within Level 3 inputs. |
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The following table represents the Company’s derivative liability activity for the embedded conversion features discussed above: |
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| June 30, | | |
| 2014 | | |
Balance, beginning of year | $ 99,348 | | |
Initial recognition of derivative liability | 1,743,149 | | |
Fair value change in derivative liability | (182,644) | | |
Conversion of derivative liability to APIC | | | |
Asher Note #2 | (31,340) | | |
Asher Note #3 | (81,791) | | |
Asher Note #4 | (40,039) | | |
Asher Note #5 | (203,652) | | |
Coventry Note #1 | (54,859) | | |
Direct Capital Note #7 | (84,116) | | |
Gel Note #1 | (63,420) | | |
Gel Note #2 | (126,553) | | |
Gel Note #3 | (23,134) | | |
JMJ Note #1 | (42,569) | | |
LG Capital Note #2 | (426,828) | | |
LG Capital Note #3 | (7,973) | | |
Prolific Note #1 | (22,895) | | |
Union Capital Note #1 | (30,590) | | |
Balance as of June 30, 2014 | $ 420,094 | | |
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