Notes Payable | 12 Months Ended |
Dec. 31, 2013 |
Notes Payable [Abstract] | ' |
Notes Payable | ' |
5. | Notes Payable | | | | | | | | | |
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A summary of notes payable as of December 31, 2013 is as follows: |
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| | Current | | Long Term | | Total | |
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1 Note payable, originated in 2004, due in 2006, | | $ | 538,887 | | $ | - | | $ | 538,887 | |
6% interest rate, secured by assets of |
DC Brands, LLC, a wholly owned subsidiary |
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1 Note payable originated in 2007, due in 2007, | | | 10,000 | | | - | | | 10,000 | |
36% interest, unsecured |
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1 Note payable originated in 2007, due in 2008, | | | 14,267 | | | - | | | 14,267 | |
24% interest, unsecured |
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6 Notes payable, originated in 2008, | | | 368,879 | | | - | | | 368,879 | |
due at various dates from July to August |
2010, 15% interest, unsecured |
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10 Notes payable, originated in 2010, due | | | 646,571 | | | 1,452 | | | 648,023 | |
January 1, 2013 - 2015, 10.25% interest, unsecured |
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8 Notes payable, originated in 2010 and 2011, due | | | 723,333 | | | - | | | 723,333 | |
at various dates from July 2013 to March 2014, |
16% interest, unsecured |
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2 Notes payable, originated in 2011 and 2012, due | | | 197,682 | | | - | | | 197,682 | |
Dec 31, 2013, 4% interest, unsecured |
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6 Notes payable, originated in 2011 &2012, due to be | | | 1,275,000 | | | - | | | 1,275,000 | |
repaid from a portion of gross sales beginning in |
Feb 2012, 12% interest, unsecured |
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1 Note payable, originated in 2012, due | | | 25,080 | | | - | | | 25,080 | |
June, 2013, 8% interest, unsecured |
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1 Note payable, originated in 2011, due | | | 263,913 | | | - | | | 263,913 | |
Jan 1, 2014, 10.25% interest, unsecured |
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4 Notes payable, originated in 2011 & 2012, due in 2012 | | | 149,442 | | | - | | | 149,442 | |
4% interest and a 15% redemption premium |
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2 Note payable, originated in 2011, due in 2012 | | | 264,598 | | | - | | | 264,598 | |
6% interest |
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1 Note payable, originated in 2012, due in 2012 | | | 25,000 | | | - | | | 25,000 | |
6% interest |
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1 Note payable, originated in 2013, due in 2015 | | | - | | | 439,835 | | | 439,835 | |
4% interest |
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6 Notes payable, originated in 2013, due in 2014 | | | 192,500 | | | - | | | 192,500 | |
0% - 10% interest |
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1 Note payable, originated in 2013, due in 2013 | | | 45,000 | | | - | | | 45,000 | |
0% interest |
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| | | 4,740,152 | | | 441,287 | | | 5,181,439 | |
Unamortized discount | | | (255,486 | ) | | (122,177 | ) | | (377,663 | ) |
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| | $ | 4,484,666 | | $ | 319,110 | | | 4,803,776 | |
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Related party notes | | | | | | | |
1 Note payable, originated in 2010, callable | | | 90,556 | | | - | | | 90,556 | |
with 366 day notice, 10% interest, unsecured |
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1 Note payable, originated in 2012, convertible into, | | | 1,000,000 | | | - | | | 1,000,000 | |
common stock after 90 days. 10.25% interest rate, |
secured by all assets of DC Brands International Inc. |
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At December 31, 2013 we had 54 notes outstanding, of which forty six notes or 74% of the aggregate principal balance were past due. To date, demand for payment has been made by three of the note holders. Three notes in the aggregate principal amount of $563,154 bearing interest at a range from 6% to 36% are past due and to date no demand for payment has been made. Notes in the aggregate principal amount of $368,879 bearing interest at a rate of 15% are owed to 6 investors in our private placements are past due and to date no demand for payment has been made. The $5 million revolving note with a principal outstanding balance as of December 31, 2013 of $1,452 bears interest at a rate of 10.25% per annum and matures on January 1, 2015. The revolving note can be converted into shares of common stock at 20% of the closing price of the stock on the day prior to conversion. During the year ended December 31, 2012, $1,307,555 was assigned to other lenders of which $646,571 is outstanding principal at the balance sheet date. The conversion rates for these assigned notes range from 50% - 70% of the average closing trade or bid price for the five to ten days prior to conversion; and others have a conversion rate the lower of a set dollar amount or 60 - 65% of the lowest two trade or bid prices for the 5-10 days prior to the conversion date. |
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We have 8 notes payable with an aggregate principal balance of $723,333 originated in 2010 and 2011 with a 36 month maturity bearing interest at 16%. We have 6 notes payable with an aggregate principal balance of $1,275,000 originated in 2011 and 2012 with a 24 month maturity bearing interest at 12%. 106 shares of Series B preferred stock was issued in conjunction with these notes. We have two notes payable originated in 2011 that converted a payable overdue to one of our vendors, the outstanding balance is $197,681. The note bears interest at 4% and has a maturity of 12/31/13. We have 1 note payable originated in 2012 with a principal balance of $25,080 originated in 2013 with a 9 month maturity bearing interest at 8%. This note requires 321,000,000 shares be reserved for the conversion of this debt. These notes are convertible into common stock after 6 months. We have one note payable originated in 2011 with an aggregate principal balance of $263,913 with a maturity date of January 1, 2014 bearing interest at 10.25%. We have 4 notes payable originated in 2011 and 2012 with an aggregate principal balance of $149,442, bearing 4% interest, which matures in 2012 and carries a 15% redemption premium. We have 1 note issued in 2013 resulting from the conversion of Series B Convertible Preferred Stock into debt convertible into common stock at a 60% discount form the current market price. We have 6 notes issued in 2013 that bear interest from 0% to 8% and are convertible into common stock of the Company at a 50 to 60% discount to market. We have one 0% note issued in 2013 related to our purchase of our 15% stake in Village Tea. |
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We have 1 note payable originated in 2011 with an aggregate principal balance of $264,598 due in 2012 bearing interest at 6%. This note is from Cut & Dried Productions, LLC a company that Richard Pearce, the former CEO of DC Brands International, owns a majority of. We still have two notes with a principal balance of $1,090,556 that are related party payables owed to Richard Pearce and Jeremy Alcamo both former officers. The note to Mr. Pearce is a senior secured convertible note with a principal balance of $1,000,000. The note to Mr. Alcamo bears interest at a rate of 10% and is callable with 366 days notice which classifies them as long term debt. Upon the occurrence of: (i) a change in ownership of twenty percent (20%) or more of our outstanding shares of common stock, (ii) our consummation of a debt or equity financing or any combination thereof and our receipt of gross proceeds of Five Million Dollars ($5,000,000) or more from such financing, or (iii) our termination of our employment agreement with Jeremy Alcamo. |
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A summary of notes payable as of December 31, 2012 is as follows: |
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| | Current | | Long Term | | Total | |
1 Note payable, originated in 2004, due in 2006, | | $ | 538,889 | | $ | - | | $ | 538,889 | |
6% interest rate, secured by assets of |
DC Brands, LLC, a wholly owned subsidiary |
| | | | | | | | | | |
1 Note payable originated in 2007, due in 2007, | | | 10,000 | | | - | | | 10,000 | |
36% interest, unsecured |
| | | | | | | | | | |
1 Note payable originated in 2007, due in 2008, | | | 14,266 | | | - | | | 14,266 | |
24% interest, unsecured |
| | | | | | | | | | |
6 Notes payable, originated in 2008, | | | 368,879 | | | - | | | 368,879 | |
due at various dates from July to August |
2010, 15% interest, unsecured |
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10 Notes payable, originated in 2010, due | | | 535,465 | | | 1,450 | | | 536,915 | |
January 1, 2015, 10.25% interest, unsecured |
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8 Notes payable, originated in 2010 and 2011, due | | | 723,333 | | | - | | | 723,333 | |
due at various dates from July 2013 to March 2014, |
16% interest, unsecured |
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2 Notes payable, originated in 2011 and 2012, due | | | 207,681 | | | - | | | 207,681 | |
Dec 31, 2013, 4% interest, unsecured |
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6 Notes payable, originated in 2011 &2012, due to be | | | 1,275,000 | | | - | | | 1,275,000 | |
repaid from a portion of gross sales beginning in |
Feb 2012, 12% interest, unsecured |
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1 Note payable, originated in 2012, due | | | 45,000 | | | - | | | 45,000 | |
June, 2013, 8% interest, unsecured |
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1 Note payable, originated in 2011, due | | | - | | | 483,103 | | | 483,103 | |
Jan 1, 2014, 10.25% interest, unsecured |
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4 Notes payable, originated in 2011 & 2012, due in 2012 | | | 195,000 | | | - | | | 195,000 | |
4% interest and a 15% redemption premium |
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1 Note payable, originated in 2011, due in 2012 | | | 386,598 | | | - | | | 386,598 | |
6% interest |
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1 Note payable, originated in 2012, due in 2012 | | | 25,000 | | | - | | | 25,000 | |
6% interest |
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| | | 4,325,111 | | | 484,553 | | | 4,809,664 | |
Unamortized discount | | | (628,328 | ) | | (189,389 | ) | | (817,717 | ) |
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| | $ | 3,696,783 | | $ | 295,164 | | | 3,991,947 | |
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Related party notes | | | | | | | | | | |
1 Note payable, originated in 2010, callable | | | - | | | 90,556 | | | 90,556 | |
with 366 day notice, 10% interest, unsecured |
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1 Note payable, originated in 2012, convertible into, | | | 1,000,000 | | | - | | | 1,000,000 | |
common stock after 90 days. 10.25% interest rate, |
secured by all assets of DC Brands International Inc. |
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At December 31, 2012 we had 45 notes outstanding, of which twenty four notes or 57% of the aggregate principal balance were past due. To date, demand for payment has been made by three of the note holders. Three notes in the aggregate principal amount of $563,156 bearing interest at a range from 6% to 36% are past due and to date no demand for payment has been made. Notes in the aggregate principal amount of $368,879 bearing interest at a rate of 15% are owed to 6 investors in our private placements are past due and to date no demand for payment has been made. The $5 million revolving note with a principal outstanding balance as of December 31, 2012 of $1,450 bears interest at a rate of 10.25% per annum and matures on January 1, 2015. The revolving note can be converted into shares of common stock at 20% of the closing price of the stock on the day prior to conversion. During the year ended December 31, 2012, $1,307,555 was assigned to other lenders of which $535,465 is outstanding principle at the balance sheet date. The conversion rates for these assigned notes range from 50% - 70% of the average closing trade or bid price for the five to ten days prior to conversion; and others have a conversion rate the lower of a set dollar amount or 60 - 65% of the lowest two trade or bid prices for the 5-10 days prior to the conversion date. |
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We have 8 notes payable with an aggregate principal balance of $723,333 originated in 2010 and 2011 with a 36 month maturity bearing interest at 16%. We have 6 notes payable with an aggregate principal balance of $1,275,000 originated in 2011 and 2012 with a 24 month maturity bearing interest at 12%. 106 shares of Series B preferred stock was issued in conjunction with these notes. We have two notes payable originated in 2011that converted a payable overdue to one of our vendors, the outstanding balance is $207,681. The note bears interest at 4% and has a maturity of 12/31/13. We have 1 note payable originated in 2012 with a principal balance of $45,000 with a 9 month maturity bearing interest at 8%. This note requires 321,000,000 shares be reserved for the conversion of this debt. These notes are convertible into common stock after 6 months. We have one note payable originated in 2011 with an aggregate principal balance of $483,103 with a maturity date of January 1, 2014 bearing interest at 10.25%. We have 4 notes payable originated in 2011 and 2012 with an aggregate principal balance of $195,000, bearing 4% interest, which matures in 2012 and carries a 15% redemption premium. |
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We have 1 note payable originated in 2011 with an aggregate principal balance of $386,598 due in 2012 bearing interest at 6%. This note is from Cut & Dried Productions, LLC a company that Richard Pearce, the former CEO of DC Brands International, owns a majority of. We still have two notes with a principal balance of $1,090,556 that are related party payables owed to Richard Pearce and Jeremy Alcamo both former officers. The note to Mr. Pearce is a senior secured convertible note with a principal balance of $1,000,000. The note note to Mr. Alcamo bears interest at a rate of 10% and is callable with 366 days notice which classifies them as long term debt. Upon the occurrence of: (i) a change in ownership of twenty percent (20%) or more of our outstanding shares of common stock, (ii) our consummation of a debt or equity financing or any combination thereof and our receipt of gross proceeds of Five Million Dollars ($5,000,000) or more from such financing, or (iii) our termination of our employment agreement with Jeremy Alcamo. |
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Transactions involving notes payable subsequent to December 31, 2013 are set forth in Note 10, Subsequent Events. |