| NOTE 4 - NOTES PAYABLE | Notes
payable Notes
payable at March 31, 2018 and December 31, 2017 consisted of the following:
Final
Maturity Interest
Rate March
31, 2018 December
31, 2017
Morchester
International Limited July 14,
2012 15 % $ 35,429 $ 35,429
Morchester
International Limited July 14, 2012 8 % 10,000 10,000
Total $ 45,429 $ 45,429 On
December 9, 2011, Elray entered into an Amended Splitrock Agreement whereby the Company acquired certain assets and liabilities
of Splitrock. As part of the liabilities assumed in terms of the Amended Splitrock Agreement, the Company assumed notes payable
of $292,929 bearing interest of 8% or 15% per annum. On January 27, 2014, the court granted an approval of the settlement agreement
with Tarpon whereby the Company would issue shares to Tarpon for resale to pay off certain liabilities. See Note 3. As a result,
principal of $247,500 and associated accrued interest acquired by Tarpon were reclassified to settlement payable. The remaining
notes issued to Morchester International Limited not purchased by Tarpon are currently in default. The default had no effect on
the notes interest rate. Convertible
notes payable Convertible
notes payable, at March 31, 2018 and December 31, 2017, consisted of the following:
Interest Rate March
31, 2018 December
31, 2017
JSJ
Investments, Inc. 10%~20 % $ 128,853 $ 128,853
WHC
Capital, LLC 22 % 116,936 116,936
Beaufort
Capital Partners, LLC 12 % 10,966 10,966
Tangiers
Investment Group, LLC 20 % 48,393 48,393
GSM
Fund Management, LLC 18 % 18,390 18,390
Microcap
Equity Group, LLC 10 % 4,654 4,654
Virtual
Technology Group, Ltd 24 % 481,500 481,500
Gold
Globe Investments Ltd 24 % 2,324,000 2,324,000
Vista
Capital Investments, LLC. 12 % 5,800 5,800
Total $ 3,139,492 $ 3,139,492 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 March 31, 2018, the remaining principal of $10,670 has not been converted. The note
is currently in default. The default had no effect on the notes interest rate.
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 and has a default interest rate of 20% per annum.
As of March 31, 2018, balance of this note was $45,560. On
January 20, 2015, the Company entered into a convertible promissory note with JSJ for $40,000. The note bears interest at 12%
and matured 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. The note is currently in default. The default had no effect on the notes interest rate. As of March
31, 2018, balance of this note was $40,000. 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 matured 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. The note is currently in default. The default had no effect on the notes interest
rate. As of March 31, 2018, balance of this note was $32,623. 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 matured 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. On September 23, 2015, the Company failed
to repay the outstanding balance of this note and a penalty of $41,978 was added to the outstanding balance pursuant to the note
terms. As of March 31, 2018, balance of this note was $116,936. This note is currently in default and has a default interest rate
of 22% per annum. 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. As of March 31, 2018, balance of this note was $10,966. This note is currently in default. The
default had no effect on the notes interest rate. 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 matured 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. As of March 31, 2018, balance of this note was $15,393. This note is currently and has a default interest
rate of 20% per annum. On
October 13, 2014, the Company entered into a convertible promissory note with Tangiers for $33,000. The note bears interest at
10% and matured 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. As of March 31, 2018, balance of this note was $33,000. This note is currently in default and has a default interest
rate of 20% per annum.
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 matured
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. As of March 31, 2018, balance of this note was $
18,390. The note is currently in default and has a default interest rate of 18% per annum. 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 matured
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. As of March 31, 2018, balance of this note was $4,654. The note is currently in default.
The default had no effect on the notes interest rate. 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. As of March 31,
2018, balance of this note was $481,500. The note is currently in default and has a default interest rate of 24% per annum. 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. As of March 31, 2018,
balance of this note was $2,324,000. The note is currently in default and has a default interest rate of 24% per annum. 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 were received on April 23, 2014.
The remaining fund of this note has not been received. As of March 31, 2018, balance of this note was $5,800 which matured on
April 15, 2016. The note is currently in default. The default had no effect on the notes interest rate. Loan and 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 March 31, 2018 and December 31, 2017, the Company had advances of $3,400 from its officer. The advances form the officers are
due on demand, unsecured with no interest. |
