Convertible Debt | 9 Months Ended |
Dec. 31, 2014 |
Notes to Financial Statements | |
NOTE 4 - CONVERTIBLE DEBT | Convertible debts outstanding, net of debt discount of $0 on March 31, 2014 | | $ | 26,707 | |
Add: Issuance of convertible debt | | | 147,000 | |
Add: reclassification from non-convertible debts to convertible debts | | | 45,500 | |
Add: reclassification from accrued interest to convertible debts | | | 2,292 | |
Less: debt discount originated from beneficial conversion feature | | | (185,455 | ) |
Less: principal converted into common stock | | | (79,574 | ) |
Add: amortization of debt discount | | | 89,932 | |
Convertible debt outstanding, net of debt discount of $95,523 on December 31, 2014 | | $ | 46,402 | |
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During the nine months ended December 31, 2014, $79,574 of convertible debts with accrued interest of $1,117 was converted into 6,125,399 shares of common stock. |
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Magna Group LLC / Hanover Holdings |
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On March 17, 2014, Nancy Louise Jones assigned her $12,000 note to Magna Group LLC, along with accrued interest of $1,077. The maturity date of this amended note is March 17, 2015. This loan bears an interest rate of 12% per annum. The note is convertible into common stock at a price of 55% multiplied by the lowest volume weighted average price for the Common Stock during the five trading day period ending on the latest complete trading day prior to the conversion date. Additionally, in no event shall the conversion price be less than $0.00004. An amount equal to $2,577 of the principal balance of the note was converted into 48,858 common shares on March 21, 2014. On April, 4 2014 and April 21, 2014, Magna Group LLC converted $10,500 of the convertible note dated March 17, 2014 into 242,891 common shares. This note has been converted in its entirety and has been surrendered to the Company. |
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On March 17, 2014, a convertible note was issued with Magna Group, LLC in the amount of $13,077. The notes bears interest of 12% per annum, and is due on March 17, 2015 and is convertible into common shares at a price of 55% multiplied by the lowest volume weighted average price for the Common Stock during the five trading day period ending on the latest complete trading day prior to the conversion date. Additionally, in no event shall the conversion price be less than $0.00004. An amount equal to $3,500 of the principal balance of the note was converted into 276,680 common shares on September 15, 2014. On October 10, 2014 and October 22, 2014, Magna Group converted $6,500 of the convertible note into 784,158 common shares. On November 26, 2014, Magna Group converted $3,077 principal amount and $872.33 interest amount of the convertible note into 569,889 common shares. This note has been converted in its entirety and has been surrendered to the Company. |
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On July 10, 2014, SCHU Mortgage & Capital, Inc. sold and assigned its $15,000 note to Magna Group LLC, along with accrued interest of $465 (see Note 3). On that same date, the Company amended the related debt agreement with the note holder. The maturity date of this amended note is July 10, 2015. This loan bears an interest rate of 12% per annum. The note is convertible into common stock at a price of 55% multiplied by the lowest volume weighted average price (VWAP) for the Common Stock during the 5 trading day period ending on the latest complete trading day prior to the conversion date. The conversion price has a floor price of $.00004 per share. On August 18, 2014 $5,465 of the principal balance was converted into 198,727 common shares. On August 26, 2014, $5,000 of the principal balance was converted into 195,084 common shares. On September 2, 2014, $5,000 of the principal balance plus interest of $155 was converted into 288,373 common shares. This note has been converted in its entirety and has been surrendered to the Company. |
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The Company evaluated the application of ASC 470-50 and ASC 470-60 and concluded the assignment constituted a debt extinguishment, with the old debt written off and the new debt initially recorded at fair value with a new effective interest rate. |
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On July 10, 2014, the Company borrowed a convertible promissory note of $22,000 from Hanover Holdings I, LLC. The maturity date of this note is July 10, 2015. This loan bears an interest rate of 12% per annum. Interest on overdue principal after default accrues at an annual rate of 22%. The conversion price is 55% multiplied by the lowest value weighted average price (VWAP) for the Common Stock during the 5 trading day period ending on the latest complete trading day prior to the conversion date. The conversion price has a floor price of $.00004 per share. As of December 31, 2014, the note is not converted yet and is still outstanding. |
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On September 10, 2014, the Company borrowed a convertible promissory note of $33,000 from Magna Equities II, LLC. The maturity date of this note is September 10, 2015. This loan bears an interest rate of 12% per annum. Interest on overdue principal after default accrues at an annual rate of 22%. The conversion price is 55% multiplied by the lowest value weighted average price (VWAP) for the Common Stock during the 5 trading day period ending on the latest complete trading day prior to the conversion date. The conversion price has a floor price of $.00004 per share. As of December 31, 2014, the note is not converted yet and is still outstanding. |
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On October 28, 2014, the Company borrowed a convertible promissory note of $25,000 from Magna Equities II, LLC. The maturity date of this note is October 28, 2015. This loan bears an interest rate of 12% per annum. Interest on overdue principal after default accrues at an annual rate of 22%. The conversion price is 55% multiplied by the lowest value weighted average price (VWAP) for the Common Stock during the 5 trading day period ending on the latest complete trading day prior to the conversion date. The conversion price has a floor price of $.00004 per share. As of December 31, 2014, the note is not converted yet and is still outstanding. |
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On December 17, 2014, the Company borrowed a convertible promissory note of $14,000 from Magna Equities II, LLC. The maturity date of this note is December 17, 2015. This loan bears an interest rate of 12% per annum. Interest on overdue principal after default accrues at an annual rate of 22%. The conversion price is 55% multiplied by the lowest value weighted average price (VWAP) for the Common Stock during the 5 trading day period ending on the latest complete trading day prior to the conversion date. The conversion price has a floor price of $.00004 per share. As of December 31, 2014, the note is not converted yet and is still outstanding. |
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The Company evaluated the embedded conversion feature within the above Magna convertible notes under ASC 815-15 and ASC 815 40 and determined embedded conversion feature does not meet the definition of a liability. Then the Company evaluated the conversion feature for a beneficial conversion feature at inception. The Company accounted for the intrinsic value of a Beneficial Conversion Feature inherent to the convertible note payable and a total debt discount of $126,010 was recorded on the Magna notes. During the nine months ended December 31, 2014, debt discount of $62,328 was amortized, and the unamortized debt discount is $63,682 as of December 31, 2014. |
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KBM Worldwide Inc. |
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On June 3, 2014, the Company borrowed $53,000 from KBM Worldwide Inc. The maturity date of this note is March 5, 2015. This loan bears an interest rate of 8% per annum. Interest on overdue principal after default accrues at an annual rate of 22%. After 180 days following the date of the note, KBM Worldwide Inc. has the right to convert all or a portion of the remaining outstanding principal amount of this note into shares of the Company’s Common Stock. The conversion price will be 55% multiplied by the lowest three trading prices for the Common Stock during the 10 trading day period ending on the latest complete trading day prior to the conversion date. The conversion price has a floor price of $.00004 per share. The note became convertible on 11/30/2014. On December 23, 2014, $5,735 of debt was converted for 1,638,571 shares of common stock. As of December 31, 2014, the remaining $47,265 balance on the note is outstanding. |
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The Company evaluated the embedded conversion feature within the above KBM Worldwide convertible notes under ASC 815-15 and ASC 815 40 and determined embedded conversion feature does not meet the definition of a liability. Then the Company evaluated the conversion feature for a beneficial conversion feature on the date the note became convertible. The Company accounted for the intrinsic value of a Beneficial Conversion Feature inherent to the convertible note payable and a debt discount of $53,000 was recorded on the KBM Worldwide notes. During the nine months ended December 31, 2014, debt discount of $21,159 was amortized, and the unamortized debt discount is $31,841 as of December 31, 2014. |
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SFH Capital LLC |
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On October 22, 2013, the Company borrowed $14,000 from SFH Capital LLC. The maturity date of this note is October 22, 2014 and this loan bears an interest rate of 12% per annum from the issuance date. On June 6, 2014 the Company entered into a debt modification agreement with the debt holder. The modified note is convertible into common stock at a price of $0.05, with an extend maturity date of January 6, 2015, and there were no other changes to the original terms of the promissory note. The principal amount of the modified note was $15,045, and on June 6, 2014, it was converted into 300,896 common shares. The note was paid off in full and the note has been surrendered to the Company. |
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On October 29, 2013, the Company borrowed $4,000 from SFH Capital LLC. The maturity date of this note is October 29, 2014 and this loan bears an interest rate of 8% per annum from the issuance date. On June 6, 2014 the Company entered into a debt modification agreement with the debt holder. The modified note is convertible into common stock at a price of $0.05, bears an extend maturity date of January 6, 2015, and there were no other changes to the original terms of the promissory note. The principal amount of the modified note was $4,193, and on June 9, 2014, it was converted into 83,858 common shares. The note was paid off in full and the note has been surrendered to the Company. |
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On December 11, 2013, the Company borrowed $12,500 from SFH Capital LLC. The maturity date of this note is December 11, 2014 and this loan bears an interest rate of 8% per annum from the issuance date. On June 6, 2014 the Company entered into a debt modification agreement with the debt holder. The modified note is convertible into common stock at a price of $0.05, bears an extend maturity date of January 6, 2015, and there were no other changes to the original terms of the promissory note. The principal amount of the modified note was $12,985, and on June 10, 2014, SFH Capital LLC converted $10,000 of the convertible note into 200,000 common shares. On September 15, 2014, $2,985 of the principal balance plus interest of $90 was converted into 60,972 shares of Common Stock. The note was paid off in full and the note has been surrendered to the Company. |
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The Company evaluated the application of ASC 470-50 and ASC 470-60 and concluded the addition of a conversion feature constituted a debt extinguishment rather than a troubled debt restructuring, with the old debt written off and the new debt initially recorded at fair value with a new effective interest rate. The Company evaluated the embedded conversion feature within the three modified SFH convertible notes under ASC 815-15 and ASC 815-40 and determined embedded conversion feature does not meet the definition of a liability. |
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The Company evaluated the conversion feature for a beneficial conversion feature at inception. The Company accounted for the intrinsic value of a Beneficial Conversion Feature inherent to the convertible note payable and a debt discount of $3,009, $839, and $2,597 were recorded on each SFH note respectively. During the nine months ended December 31, 2014, debt discount of $3,009, $839, and $2,597 were fully amortized on the first, second and third SFH notes, respectively, since they were fully converted. The unamortized debt discount is $0 as of December 31, 2014. |
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Other Convertible Notes |
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Convertible debts were issued September 2009, and March 2010, bearing interest at a rate of 8% per annum, due in one year, and are convertible at $0.00001 per share, and the total balance outstanding as of March 31, 2014 was $3,130. During the nine months ended December 31, 2014, note principal of $2,470 and interest of $104 reclassified to note principal were converted into 1,285,300 common shares. As of December 31, 2014, other convertible notes have a total outstanding balance of $660. |