| NOTE 5 - NOTES PAYABLE | Notes
payable at June 30, 2015 and December 31, 2014 consisted of the following:
Final Maturity Interest Rate
June 30, 2015
December 31, 2014
Morchester International Limited 7/14/12 15 % $ 35,429 $ 35,429
Morchester International Limited 7/14/12 8 % 10,000 10,000
Total $ 45,429 $ 45,429 All
of these notes are past due and currently in default. Convertible
notes payable Convertible
notes payable, at June 30, 2015 and December 31, 2014, consisted of the following:
Interest Rate June
30, 2015 December 31, 2014
JSJ Investments,
Inc. 10%~12 % $ 135,065 $ 60,670
KBM Worldwide,
Inc. 8 % 57,190 140,000
LG Capital Funding,
LLC 8 % 37,000 72,000
Tarpon 10 % - 30,475
WHC Capital, LLC
12 % 74,958 75,000
Beaufort Capital
Partners, LLC 12 % 16,960 21,000
Tangiers Investment
Group, LLC 0%~10 % 85,270 133,000
Darling Capital,
LLC 8 % - 25,000
GSM Fund Management,
LLC 12 % 50,951 -
Auctus Private
Equity Fund, LLC 8 % 40,000 40,000
Microcap Equity
Group, LLC 10 % 20,000 -
Virtual Technology
Group, Ltd 0 % 481,500 695,000
Gold Globe Investments
Ltd 0 % 2,324,000 2,380,000
Vista Capital
Investments, LLC. 12 % 5,800 5,800
Subtotal 3,328,694 3,677,945
Debt discount (1,255,059 ) (1,998,018 )
Total $ 2,073,635 $ 1,679,927 JSJ
Investments, Inc. On
May 31, 2013, the Company entered into a convertible promissory note with JSJ Investments, Inc. (JSJ) for
$50,000. The note matured on December 2, 2013. The note holder has the option to convert the note to common shares in
the Company at a discount of 50% of the average closing price over the last 120 days prior to conversion, or the average
closing price over the last seven days prior to conversion. As of June 30, 2015, the remaining principal of $10,670 has
not been converted. On
August 21, 2014, the Company entered into a convertible promissory note with JSJ for $50,000 cash. The note matured on February
21, 2015. Upon the maturity, the note has a cash redemption premium of 150% of the principal amount. The note is convertible to
the Companys common shares at a discount of 60% of the average of the three lowest bids on the twenty days before the date
this note is executed, or 60% of the average of the three lowest bids during the twenty trading days preceding the delivery of
any conversion notice, whichever is lower. The note is currently in default. On
January 20, 2015, the Company entered into a convertible promissory note with JSJ for $40,000. The note bears interest at 12%
and matures on July 20, 2015. Upon the maturity, the note has a cash redemption premium of 150% of the principal amount. The note
is convertible to the Companys common shares at 40% of the lowest trading price on the twenty days before the date this
note is executed, or 40% of the lowest trading price during the twenty trading days preceding the delivery of any conversion notice,
whichever is lower. On
January 20, 2015, the Company entered into a convertible promissory note with JSJ for $60,000, which was issued in exchange for
a portion of the promissory note issued to VTG on January 23, 2014. The note bears interest at 12% and matures on January 20,
2015. JSJ has the right to convert the balance outstanding into the Companys common stock at a rate equal to 50% of the
lowest trading price on the twenty days before the date this note is executed, or 50% of the lowest trading price during the twenty
trading days preceding the delivery of any conversion notice, whichever is lower. The Company recorded a loss on extinguishment
of debt of $441 related to the exchange. During the six months ended June 30, 2015, JSJ converted $25,605 of its note to 27,590,812
shares of common stock. KBM
Worldwide, Inc. On
June 26, 2014, the Company entered into a convertible promissory note with KBM Worldwide Inc. (KBM) for $32,500.
The note matures on March 30, 2015. During the six months ended June 30, 2015, the Company issued 443,583 shares of common stock
for the conversion of the entire note and accrued interest of $1,300. On
August 12, 2014, the Company entered into a convertible promissory note with KBM for $32,500. The note matures on May 14,
2015. During the six months ended June 30, 2015, the Company issued 5,038,153 shares of common stock for the conversion of the
note in the amount of $32,500 and accrued interest of $1,300. On
October 2, 2014, the Company entered into a convertible promissory note with KBM for $37,500. The note matures on July 7, 2015.
During the six months ended June 30, 2015, KBM converted $17,810 of this note to 103,866,845 shares of common stock. On
November 10, 2014, the Company entered into a convertible promissory note with KBM for $37,500. The note matures on August 12,
2015. In
the event that these notes remain unpaid at that date, the Company will pay default interest of 22%. KBM has the right after a
period of 180 days to convert the balance outstanding into the Companys common stock at a rate equal to 40% of the average
lowest three closing bid prices during the ten trading days prior to the conversion date. LG
Capital Funding, LLC On
November 10, 2014, the Company entered into a convertible promissory note with LG Capital Funding, LLC (LG) for
$37,000. The note matures on November 10, 2015. LG has the right after a period of 180 days to convert the balance outstanding
into the Companys common stock at a rate equal to 50% of the average lowest three trading prices during the fifteen trading
days prior to the conversion date. On
November 10, 2014, the Company entered into a convertible promissory note with for $50,000, which was issued in exchange for a
portion of the promissory note issued to VTG on January 23, 2014. The note bears interest at 8% and matures on November 10,
2015. LG has the right to convert the balance outstanding into the Companys common stock at a rate equal to 50% of the
average lowest three trading prices during the fifteen trading days prior to the conversion date. During the six months ended
June 30, 2015, the Company issued 54,696,108 shares of common stock for the conversion of this note in the amount of $35,000 and
accrued interest of $909. Tarpon On
February 3, 2014, the Company entered into a convertible promissory note with Tarpon in the amount of $132,000. The promissory
note was issued on terms of a court granted and approved settlement agreement with Tarpon on January 27, 2014. See Note 4. The
note bears interest at 10% and matured on August 3, 2014. Tarpon has the right after a period of 180 days to convert the balance
outstanding into the Companys common stock at a rate equal to 50% of the lowest closing bid price in the 20 trading days
prior to the conversion date. For interest that accrues pursuant to this note, the conversion price shall be at $0.001 regardless
of the trading price. The conversion price should also be adjusted if the Company issued any shares, prior to the conversion of
the note, at a price lower than the conversion price. During the six months ended June 30, 2015, the Company issued 3,311,996
shares of common stock for the conversion of this note in the amount of $30,475 and accrued interest and fees of $7,742. WHC
Capital, LLC On
September 23, 2014, the Company entered into a convertible promissory note with WHC Capital, LLC (WHC) for $75,000.
The note bears interest at 12% and matures on September 23, 2015. WHC has the right at any time during the period beginning on
the date of this note to convert the balance outstanding into the Companys common stock at a rate equal to 50% of the lowest
intra-day trading price during the fifteen trading days prior to the conversion date. During the six months ended June 30, 2015,
WHC converted $42 of this note to 844,762 shares of common stock. Beaufort
Capital Partners, LLC On
September 2, 2014, the Company entered into a convertible promissory note with Beaufort Capital Partners, LLC (Beaufort)
for $21,000. The note matured on March 2, 2015. Beaufort has the right after the maturity date to convert the balance outstanding
into the Companys common stock at a rate equal to 50% of the lowest trading prices during the fifteen trading days prior
to the conversion date. Under certain conditions, the conversion price would be reset to $0.0001 or 65% off the lowest price of
the previous five trading days. During the six months ended June 30, 2015, the Company issued 808,000 shares of common stock for
the conversion of this note in the amount of $4,040. Tangiers
Investment Group, LLC On
October 13, 2014, the Company entered into a convertible promissory note with Tangiers Investment Group LLC (Tangiers)
for $55,000. The note matures on October 13, 2015. Tangiers has the right after a period of 180 days to convert the balance outstanding
into the Companys common stock at a rate equal to 45% of the lowest trading prices during the twenty trading days prior
to the conversion date. During the six months ended June 30, 2015, the Company issued 22,750,000 shares of common stock for the
conversion of this note in the amount of $2,730. On
October 13, 2014, the Company entered into a convertible promissory note with Tangiers for $33,000. The note bears interest at
10% and matures on October 13, 2015. Tangiers has the right after a period of 180 days to convert the balance outstanding into
the Companys common stock at a rate equal to 45% of the lowest trading prices during the twenty trading days prior to the
conversion date. On
December 3, 2014, the Company entered into a convertible promissory note with Tangiers for $45,000, which was issued in exchange
for a portion of the promissory note issued to GGIL on January 23, 2014. The note matures on December 3, 2015. Tangiers has the
right to convert the balance outstanding into the Companys common stock at a rate equal to 45% of the lowest three trading
price during the ten trading days prior to the conversion date. During the six months ended June 30, 2015, the Company issued
34,736,868 shares of common stock for the conversion of this note in the amount of $45,000. Darling
Capital LLC On
November 6, 2014, the Company entered into a convertible promissory note with Darling Capital LLC (Darling) for
$25,000. The note matures on August 6, 2015. Auctus has the right after a period of 180 days to convert the balance outstanding
into the Companys common stock at a rate equal to 50% of the average of the lowest three trading prices during the fifteen
trading days prior to the conversion date. During the six months ended June 30, 2015, the Company issued 95,115,311 shares of
common stock for the conversion of this note in the amount of $25,000 and accrued interest and fees of $11,245. GSM
Fund Management LLC On
January 30, 2015, the Company entered into an assignment and modification agreement to assign $62,500 of the convertible promissory
note of VTG dated January 23, 2014 to GSM Fund Management LLC (GSM). The note bears interest at 12% and matures
on January 30, 2016. GSM has the right after a period of 180 days to convert the balance outstanding into the Companys
common stock at a rate equal to 50% of the lowest closing bid price in the 15 trading days prior to the conversion date. The Company
recorded a loss on extinguishment of debt of $52,364 related to the exchange. During the six months ended June 30, 2015, the Company
issued 4,544,144 shares of common stock for the conversion of this note in the amount of $11,549. Auctus
Private Equity Fund LLC On
November 7, 2014, the Company entered into a convertible promissory note with Auctus Private Equity Fund LLC (Auctus)
for $40,000. The note matures on August 7, 2015. Auctus has the right after a period of 180 days to convert the balance outstanding
into the Companys common stock at a rate equal to 50% of the average of the lowest two trading prices during the twenty-five
trading days prior to the conversion date. During the six months ended June 30, 2015, the Company issued 3,622,827 shares of common
stock for the conversion of accrued interest in the amount of $1,261. Microcap
Equity Group, LLC On
February 23, 2015, the Company entered into a convertible promissory note with Microcap Equity Group LLC ("Microcap")
for $20,000, which was issued in exchange for a portion of the promissory note issued to VTG on January 23, 2014. The note matures
on January 23, 2017. Microcap has the right to convert the balance outstanding into the Companys common stock at a rate
equal to 40% of the lower of the lowest bid price during the thirty trading days prior to the conversion date, or the lowest bid
price on the day that the converted shares are cleared for physical delivery. The Company recorded a loss on extinguishment of
debt of $28,213 related to the exchange. Virtual
Technology Group, Ltd On
January 23, 2014, the Company entered into a convertible promissory note with VTG for $1,500,000. VTG has the right after a period
of 180 days to convert the balance outstanding into the Companys common stock at a rate equal to 100% of the average of
the closing bid prices for the seven trading days prior to the conversion date when the Companys shares are traded in the
OTCQB or during the ten trading days prior to the conversion date when the Companys shares are traded on another other
exchange. On November 10, 2014, $50,000 of this note was replaced with a note issued to LG. On January 20, January 23 and January
30, 2015, $60,000, $20,000 and $62,500 of this note were replaced with notes issued to JSJ, Microcap and GSM. During the six months
ended June 30, 2015, the Company issued 181,330 shares of common stock for the conversion of $71,000 of this note. Gold
Globe Investments Ltd On
January 23, 2014, the Company entered into a convertible promissory note with GGIL for $2,800,000. GGIL has the right after a
period of 180 days to convert the balance outstanding into the Companys common stock at a rate equal to 100% of the average
of the lowest three trading prices during the seven trading days prior to the conversion date when the Companys shares
are traded in the OTCQB or during the ten trading days prior to the conversion date when the Companys shares are traded
on another exchange. On December 3, 2014, $45,000 of this note was replaced with a note issued to Tangiers. During the six months
ended June 30, 2015, the Company issued 172,786 shares of common stock for the conversion of $56,000 of this note. Vista
Capital Investments, LLC. On
April 15, 2014, the Company entered into a convertible promissory note with Vista Capital Investments, LLC (Vista)
for $250,000. The note has an original issuance discount of $25,000. The note matures 2 years from the date of each payment of
the principal from Vista. In the event that the note remains unpaid at maturity date, the outstanding balance shall immediately
increase to 120% of the outstanding balance. Vista has the right to convert the outstanding balance into the Companys common
stock at a rate equal to the lesser of $0.008 per share or 60% of the lowest trade occurring during the twenty-five consecutive
trading days preceding the conversion date. Due to certain events that occurred during 2014, the conversion price has been reset
to $0.005 per share or 50% of the lowest trade occurring during the twenty-five consecutive trading days preceding the conversion
date. Pursuant to the agreement, if the conversion price calculated under this agreement is less than $0.01 per share, the principal
amount outstanding shall increase by $10,000 (Sub-Penny). $25,000 net proceeds was received on April 23, 2014. The
remaining fund of this note has not been received. Debt
Discount The
table below presents the changes of the debt discount during the six months ended June 30, 2015:
Amount
December 31, 2014 $ 1,998,018
Additions 40,000
Amortization (782,959 )
June 30, 2015 $ 1,255,059 Advances
from shareholders On September 5, 2008, Elmside Pty Ltd, a company related
to a former director, agreed to an interest free loan of $55,991 to the Company on an as-needed basis to fund the business operations
and expenses of the Company until December 9, 2011, the due date of the loan. The note is in default. As of June 30, 2015 and
December 31, 2014, the Company also has $2,500 advances from its chief executive officer. |
