| Convertible Notes Payable | NOTE 7 - CONVERTIBLE NOTES PAYABLE Asher Enterprises, Inc. On April 11, 2013, the Company entered into a Convertible Note Agreement with Asher Enterprises Inc. for a $42,500 convertible note payable with interest of 8% per annum, unsecured, and due January 14, 2014. The note is convertible into common shares of the Company at a conversion rate of 55% of the market price, calculated as the average of the three lowest trading prices in the previous 10 days leading up to the date of conversion. The entire principle balance of $42,500 was converted into 5,606,783 common shares of the Company. The shares were issued free of any restrictions as permitted by Section 3(a)(10) of the Securities Act. On May 13, 2013, the Company entered into a Convertible Note Agreement with Asher Enterprises Inc. for a $63,000 convertible note payable with interest of 8% per annum, unsecured, and due February 17, 2014. The note is convertible into common shares of the Company at a conversion rate of 55% of the market price, calculated as the average of the three lowest trading prices in the previous 10 days leading up to the date of conversion. The entire principle balance of $63,000 was converted into 38,283,516 common shares of the Company. On June 14, 2013, the Company entered into a Convertible Note Agreement with Asher Enterprises Inc. for a $37,500 convertible note payable with interest of 8% per annum, unsecured, and due March 18, 2014. The note is convertible into common shares of the Company at a conversion rate of 55% of the market price, calculated as the average of the three lowest trading prices in the previous 10 days leading up to the date of conversion. The entire principle balance of $37,500 was converted into 25,333,333 common shares of the Company. The shares were issued free of any restrictions as permitted by Section 3(a)(10) of the Securities Act. On July 10, 2013, the Company, entered into a Securities Purchase Agreement whereby the Company sold a Convertible Promissory Note to Asher Enterprises, Inc., a Delaware corporation, in the original principal amount of $37,500, and accruing interest at eight percent (8%) per annum. The Note is convertible into the Company’s common stock at a conversion price equal to fifty-five percent (55%) of the then-prevailing market price, beginning one hundred eighty (180) days from the date of the Note’s issuance. As of December 31, 2014, the entire principle balance of $37,500 was converted into 34,210,025 shares of common stock in the Company. The shares were issued free of any restrictions as permitted by Section 3(a)(10) of the Securities Act. On September 12, 2013, the Company, entered into a Securities Purchase Agreement whereby the Company sold a Convertible Promissory Note to Asher Enterprises, Inc., a Delaware corporation, in the original principal amount of $32,500, and accruing interest at eight percent (8%) per annum. The Note is convertible into the Company’s common stock at a conversion price equal to fifty-five percent (55%) of the then-prevailing market price, beginning one hundred eighty (180) days from the date of the Note’s issuance. As of December 31, 2014, the entire principle balance of $32,500 was converted into 43,779,046 shares of common stock in the Company. The shares were issued free of any restrictions as permitted by Section 3(a)(10) of the Securities Act. On December 23, 2013, the Company, entered into a Securities Purchase Agreement whereby the Company sold a Convertible Promissory Note to Asher Enterprises, Inc., a Delaware corporation, in the original principal amount of $60,000, and accruing interest at eight percent (8%) per annum. The Note is convertible into the Company’s common stock at a conversion price equal to fifty-five percent (55%) of
the then-prevailing market price, beginning one hundred eighty (180) days from the date of the Note’s issuance. As of December 31, 2014, the entire principle balance of $60,000 was converted into 110,567,623 shares of common stock. The shares were issued free of any restrictions as permitted by Section 3(a)(10) of the Securities Act. On February 14, 2014, the Company, entered into a Securities Purchase Agreement whereby the Company sold a Convertible Promissory Note to Asher Enterprises, Inc., a Delaware corporation, in the original principal amount of $22,500, and accruing interest at eight percent (8%) per annum. The Note is convertible into the Company’s common stock at a conversion price equal to fifty-five percent (55%) of the then-prevailing market price, beginning one hundred eighty (180) days from the date of the Note’s issuance. As of December 31, 2014, Asher has converted $22,200 of principle debt into 192,975,045 shares of common stock, leaving a balance remaining on the convertible note of $300. The shares were issued free of any restrictions as permitted by Section 3(a)(10) of the Securities Act. In the year ended December 31, 2014, Asher converted $250,710 of convertible debt and $5,900 of accrued interest into 477,381,748 common shares of the Company. In the year ended December 31, 2013, Asher Enterprises converted $44,490 of convertible notes payable into 7,265,116 common shares. The shares were issued free of any restrictions as permitted by Section 3(a)(10) of the Securities Act. Premier Venture Partners, LLC (“Premier”) On October 24, 2013, the Company entered into a court ordered settlement with Premier Venture Partners, LLC in the amount of $63,063. Premier Venture Partners, LLC purchased bona fide accounts payable vendor accounts of the Company in the amount of $63,063 which pursuant to the courts judgment will be settled in the form of common stock of the Company. Premier’s entitled to receive the number of common shares equal to a number, “with an aggregate value equity to (i) the sum of the claim amount plus a 10% settlement fee and plaintiff’s reasonable attorney fees and expense, (ii) divided by the lower of the following: (1) fifty percent of the closing bid price for the trading day immediately preceding the order date or (2) fifty percent of the arithmetic average of the individual daily VWAPs for any five trading days within the calculation period”. The sum of the claim amount plus a 10% settlement fee and plaintiff’s reasonable attorney fees and expenses were calculated as follows: Claim amount $ 63,063 10% settlement fee 6,306 Attorney fees 5,770 Total $ 75,139 Management calculates the conversion price to be $0.00114 using fifty percent of the arithmetic average of the individual daily VWAPs for any five trading days within the calculation period. Accordingly, Premier is entitled to receive 65,911,456 common shares of the Company as part of the settlement. In the year ended December 31, 2014, the Company issued 48,637,933 common shares to Premier pursuant to the court ordered settlement. As of December 31, 2014, the Company issued 58,637,933 shares of common stock to Premier to settle the court ordered liability, leaving a $0 balance owed. The shares were issued free of any restrictions as permitted by Section 3(a)(10) of the Securities Act. Dennis Pieczarka On May 22, 2013 the Company executed a convertible debenture agreement with Dennis Pieczarka for a $2,500 convertible note payable with interest of 9% per annum, unsecured and due on May 22, 2014. The holder has the right to convert the principle plus interest into common shares of the Company at a conversion rate of $0.15 per share. Christopher Thompson On April 1, 2013, the Company entered into a Securities Purchase Agreement with Christopher Thompson for a $10,000 convertible note payable due interest at 9% per annum, unsecured, and due April 1, 2014. The note is convertible into common shares of the Company at a conversion rate of $.10per share. On May 27, 2014, Christopher Thompson assigned his $10,000 note with accrued interest of $1,025 to WHC Capital, LLC leaving a $0 balance remaining on this note. On May 1, 2014, the Company entered into a Securities Purchase Agreement and convertible promissory note with Christopher Thompson in the amount of $15,000. The convertible promissory note has interest at 9.9% per annum, unsecured, and due May 1, 2015. The convertible note’s principle and accrued interest may at any time be converted into shares of the Company’s stock at a conversion rate equal to 60% of the lowest closing bid price in the ten days prior to conversion. As of December 31, 2014, there has been no debt converted on this note. On July 1, 2014, the Company entered into a convertible promissory note with Christopher Thompson in the amount of $15,000. The convertible promissory note has interest at 9.9% per annum, unsecured, and due July 1, 2015. The convertible note’s principle and accrued interest may be converted into shares of the Company’s stock at a conversion rate equal to 60% of the lowest closing bid price in the ten days prior to conversion. As of December 31, 2014, there has been no debt converted on this note. On August 1, 2014, the Company entered into a convertible promissory note with Christopher Thompson in the amount of $30,000. The convertible promissory note has interest at 9.9% per annum, unsecured, and due February 1, 2015. The convertible note’s principle and accrued interest may be converted into shares of the Company’s stock at a conversion rate equal to 60% of the lowest closing bid price in the ten days prior to conversion. As of December 31, 2014, there has been no debt converted on this note. On September 29, 2014, the Company entered into a convertible promissory note with Christopher Thompson in the amount of $30,000. The convertible promissory note has interest at 9.9% per annum, unsecured, and due March 29, 2015. The convertible note’s principle and accrued interest may be converted into shares of the Company’s stock at a conversion rate equal to 60% of the lowest closing bid price in the ten days prior to conversion. As of December 31, 2014, there has been no debt converted on this note. James Ault On July 1, 2013, the Company entered into a Securities Purchase Agreement and convertible note payable with James Ault in the amount of $2,565. The note payable bears interest at 9% per annum, unsecured, and due July 1, 2014. The note is convertible into common shares of the Company at a conversion rate of $.095 per share. Charles Knoop On July 9, 2013, the Company entered into a Securities Purchase Agreement with Charles Knoop for a $1,000 note payable due interest at 9% per annum, unsecured, and due July 9, 2014. The note is convertible into common shares of the Company at a conversion rate of $.095 per share. LG Capital Funding On March 7, 2014, the Company entered into a convertible promissory note with LG Capital Funding, LLC for an amount of $32,000 with 8% per annum and a maturity date of March 7, 2015. The convertible note’s principle and accrued interest may be converted into shares of the Company’s stock at a conversion rate equal to 60% of the lowest closing bid price in the fifteen days prior to conversion. As of December 31, 2014, there has been $15,445 of principle converted into 200,667,134 shares of common stock on this note leaving a balance of $16,555. The shares were issued free of any restrictions as permitted by Section 3(a)(10) of the Securities Act. On June 16, 2014, the Company entered into a convertible promissory note with LG Capital Funding, LLC for an amount of $42,000 with 8% per annum and a maturity date of June 16, 2015. The convertible note’s principle and accrued interest be converted into shares of the Company’s stock at a conversion rate equal to 55% of the lowest closing bid price in the fifteen days prior to conversion. As of December 31, 2014, there has been no debt converted on this note. JMJ Financial On March 15, 2014, the Company entered into a convertible promissory note with JMJ Financial for up to $500,000 with interest of 12% per annum. The convertible note’s principle and accrued interest may be converted into shares of the Company’s stock at a conversion rate equal to 60% of the lowest closing bid price in the twenty-five days prior to conversion. In March of 2014, the Company received $30,000 with $7,333 of original issue discount. In June of 2014, the Company received an additional $30,000 with $7,333 of original issue discount. In September of 2014, the Company received an additional $30,000 with $7,333 of original issue discount. As of December 31, 2014, the Company has received $90,000 cash and recorded $22,000 of original issue discount pursuant to this convertible promissory note with JMJ Financial. As of December 31, 2014, JMJ Financial has converted $13,980 of principle into 233,000,000 common shares resulting in a balance of $98,020. The shares were issued free of any restrictions as permitted by Section 3(a)(10) of the Securities Act. IBC Funds, LLC On April 24, 2014, IBC Funds, LLC, a Nevada limited liability company, acquired by assignment, debts owed by Monster Arts, Inc. to fourteen (14) creditors in the amount of $208,321. Likewise, on April 24, 2014, IBC Funds and Monster Arts, Inc. executed that certain Settlement Agreement and Stipulation, whereby Monster Arts, Inc. agreed to settle the debt of $208,321, and to pay the debt by the issuance of shares pursuant to Section 3(a)(10) of the Securities Act, which provides that the issuance of shares are exempt from the registration requirement of Section 5 of the Securities Act. In relevant part, Section 3(a)(10) of the Securities Act provides an exemption from the registration requirement for securities: (i) which are issued in exchange for a bona fide claim, (ii) where the terms of the issuance and exchange are found by a court to be fair to those receiving shares, (iii) notice of the hearing is provided to those to receive shares and they are afforded the opportunity to be heard, (iv) the issuer must advise the court prior to its hearing that it intends to rely on the exemption provided in Section 3(a)(10) of the Securities Act, and (v) there cannot be any impediments to the appearance of interested parties at the hearing. On April 25, 2014, in a court proceeding styled IBC Funds, LLC, a Nevada limited Liability Company, Plaintiff vs. ., a Nevada corporation, Defendant, bearing Civil Action in the Circuit Court in the Twelfth Judicial Circuit in and for Sarasota County, Florida As set forth in the order, the court found that the terms and conditions of the exchange were fair to Monster Arts, Inc. and IBC Funds within the meaning of Section 3(a)(10) of the Securities Act, and that the exchange of the debt for our securities was not made under Title 11 of the United States Code. As of December 31, 2014, as permitted by the court order and the Settlement Agreement and Stipulation, the Company has issued 590,000,000 shares to IBC LLC for the conversion of $137,000, leaving a balance of $71,071. The shares were issued free of any restrictions as permitted by Section 3(a)(10) of the Securities Act. WHC Capital, LLC On May 27, 2014, Christopher Thompson assigned his $10,000 convertible note payable with accrued interest of $1,025 to WHC Capital, LLC. The original convertible note payable and securities purchase agreement is dated April 1, 2013,in the amount of $10,000 with interest of 9% per annum, unsecured, and due April 1, 2014. As of December 31, 2014, there has been $10,000 of principle and $1,051 of accrued interest converted into 22,325,475 shares of our common stock, leaving a balance of $0 on the this note. The shares were issued free of any restrictions as permitted by Section 3(a)(10) of the Securities Act. On April 30, 2014, the Company entered into a convertible promissory note with WHC Capital, LLC in the amount of $22,000 , with interest of 12% per annum, unsecured, and due April 30, 2015. The convertible note’s principle and accrued interest may be converted into shares of the Company’s stock at a conversion rate equal to 55% of the lowest closing bid price in the fifteen days prior to conversion. As of December 31, 2014, there has been $6,033 of principle converted into 18,282,697 shares of our common stock, leaving a balance of $15,967. The shares were issued free of any restrictions as permitted by Section 3(a)(10) of the Securities Act. On July 11, 2014, the Company entered into a Securities Exchange and Settlement Agreement (SE&S) with WHC Capital, LLC (WHC, LLC), whereby WHC, LLC purchased $5,161 of note payables debt due to Jennifer Salwender pursuant to an Assignment of Debt Agreement. The convertible note’s principle and accrued interest may be converted into shares of the Company’s stock at a conversion rate equal to 55% of the lowest closing bid price in the fifteen days prior to conversion. As of December 31, 2014, there has been no debt converted on this note. Jennifer Salwender On May 15, 2014, the Company entered into a convertible promissory note with Jennifer Salwender in the amount of $20,000 with 9.9% interest per annum and a maturity date of May 15, 2015. The convertible note’s principle and accrued interest may be converted into common shares of the Company’s after 180 days from the issuance date at a discount of 40% off the lowest closing traded price during the prior 10 trading days to a notice of conversion. As of December 31, 2014, there has been no debt converted on this note. On June 14, 2014, the Company entered into a convertible promissory note with Jennifer Salwender in the amount of $20,000 with 9.9% interest per annum and a maturity date of June 14, 2015. The convertible note’s principle and accrued interest may be converted into common shares of the Company’s after 180 days from the issuance date at a discount of 40% off the lowest closing traded price during the prior 10 trading days to a notice of conversion. As of December 31, 2014, there has been no debt converted on this note. ADAR BAYS, LLC On May 2, 2014, the Company entered into a convertible promissory note with ADAR BAYS, LLC in an amount of $30,000 with 8% per annum and a maturity date of May 2, 2015. The convertible note’s principle and accrued interest may be converted into shares of the Company’s stock at a conversion rate equal to 50% of the lowest closing bid price in the fifteen days prior to conversion. As of December 31, 2014, there has been no debt converted on this note. Brent Denlinger On April 16, 2014, the Company entered into a convertible promissory note with Brent Denlinger in an amount of $15,000 with 9.9% per annum and a maturity date of April 16, 2015. The convertible note’s principle and accrued interest may be converted into shares of the Company’s stock at a conversion rate equal to 60% of the lowest closing bid price in the ten days prior to conversion. As of December 31, 2014, there has been no debt converted on this note. KBM Worldwide, Inc. On June 13, 2014, the Company entered into a convertible promissory note with KBM Worldwide, Inc. in an amount of $63,000 with 8% per annum and a maturity date of March 17, 2015. The convertible note’s principle and accrued interest may be converted into shares of the Company’s stock at a conversion rate equal to 55% of the lowest closing bid price in the ten days prior to conversion. As of December 31, 2014, there has been no debt converted on this note. Jessie Redmayne On April 4, 2014, the Company entered into a convertible promissory note with Jessie Redmayne in an amount of $5,000 with 9.9% per annum and a maturity date of April 4, 2015. The convertible note’s principle and accrued interest may be converted into shares of the Company’s stock at a conversion rate equal to 60% of the lowest closing bid price in the ten days prior to conversion. As of December 31, 2014, there has been no debt converted on this note. Anubis Capital Partners On April 1, 2014, the Company executed a convertible promissory note with Anubis Capital Partners in the amount of $127,900 with interest of 10% per annum and a maturity date of April 1, 2015. The convertible promissory note was executed in return for consulting services provided to the Company. The convertible note’s principle and accrued interest may be converted into shares of the Company’s stock at a conversion rate equal to 50% of the lowest closing bid price in the twenty days prior to conversion. On June 27, 2014, Anubis Capital Partners entered into a purchase and assumption agreement with Beaufort Capital Partners, LLC whereby Anubis Capital Partners assigned a $63,950 of their note balance to Beaufort Capital Partners, LLC. As of December 31, 2014, Anubis Capital Partners has a balance on this note of $63,950. On October 1, 2014, the Company executed a convertible promissory note with Anubis Capital Partners in the amount of $83,950 with interest of 8% per annum and a maturity date of October 1, 2015. The convertible promissory note was executed in return for three (3) months of consulting services provided to the Company. The convertible note’s principle and accrued interest may be converted into shares of the Company’s stock at a conversion rate equal to 50% of the lowest closing bid price in the twenty days prior to conversion. There has been no conversion or payments against this note, leaving a balance of $83,950. Beaufort Capital Partners, LLC On June 27, 2014, the Company entered into a convertible promissory note with Beaufort Capital Partners LLC in the amount of $75,000, includes $25,000 of original issue discount, with 12% interest per annum and a maturity date of December 27, 2014. The convertible note’s principle and accrued interest may be converted into common shares of the Company’s after the maturity date at a discount of 50% off the lowest traded price during the prior 20 trading days to a notice of conversion. As of December 31, 2014, Beaufort has converted $1,137 of debt on this note into 113,700,000 shares of common stock, leaving a balance $73,863. The shares were issued free of any restrictions as permitted by Section 3(a)(10) of the Securities Act. On June 27, 2014, Beaufort Capital Partners, LLC (“Beaufort”) entered into a purchase and assumption agreement whereby Beaufort would purchase a portion of a convertible promissory note originally issued to Anubis Capital Partners on April 1, 2014 in the amount of $127,900 with interest of 10% per annum and a maturity date of April 1, 2015. The convertible note’s principle and accrued interest may be converted into shares of the Company’s stock at a conversion rate equal to 50% of the lowest closing bid price in the twenty days prior to conversion. Sojourn Investments, LP On July 14, 2014, the Company entered into a Debt Purchase Agreement with Sojourn Investments, LP whereby the Company issued a convertible promissory note in the amount of $37,500 which included $12,500 of original issue discount and due on June 14, 2015. The convertible note has interest of 12% per annum and is convertible into common shares of the Company at a conversion rate of 50% off the lowest trading market price for 20 days prior to conversion. As of December 31, 2014, there has been no debt converted on this note. On November 15, 2014, the Company entered into a convertible promissory note with Sojourn Investments, LP in the amount of $7,500 which included $1,500 of original issue discount and due on November 15, 2015. The convertible note has interest of 12% per annum and is convertible into common shares of the Company at a conversion rate of 50% off the lowest trading market price for 20 days prior to conversion. As of December 31, 2014, there has been no debt converted on this note. Ambrosial Consulting Group On October 15, 2014, the Company executed a convertible promissory note with Ambrosial Consulting Group in the amount of $67,250 with interest of 8% per annum and a maturity date of October 15, 2015. The convertible promissory note was executed in return for six (6) months of consulting services to be provided to the Company. The convertible note’s principle and accrued interest may be converted into shares of the Company’s stock at a conversion rate equal to 50% of the lowest closing bid price in the twenty (20) days prior to conversion. As of December 31, 2014, there have been no conversions and the note has a balance of $67,250. The following table summarizes the total outstanding principle on convertible notes payable: December 31, December 31, Convertible Notes Payable- Asher Enterprises, Inc. $ 300 $ 228,510 Convertible Notes Payable - Tangier Investors, LLP - - Convertible Note Payable- Premier Venture Partners LLC - 17,370 Convertible Note Payable- Dennis Pieczarka 2,500 2,500 Convertible Note payable - Christopher Thompson 90,000 10,000 Convertible Note payable - James Ault 2,565 2,565 Convertible Note payable - Charles Knoop 1,000 1,000 Convertible Note payable - LG Capital Funding 58,555 - Convertible Note payable - JMJ Financial 98,020 - Convertible Note payable - IBC Funds, LLC 71,071 - Convertible Note payable - WHC Capital, LLC 21,077 - Convertible Note payable - ADAR BAYS, LLC 30,000 - Convertible Note payable - Brent Delinger 15,000 - Convertible Note payable - Jessie Redmayne 5,000 - Convertible Note payable - Jennifer Salwender 40,000 - Convertible Note payable - Anibus Capital Partners 147,900 - Convertible Note payable - Beaufort Capital Partners, LLC 137,812 - Convertible Note payable - KBM Worldwide 63,000 - Convertible Note payable - Sojourn Investments, LP 45,000 - Convertible Note payable - Ambrosial Consulting Group 67,250 Less: Debt discount (339,934 ) (113,361 ) Total Convertible Notes Payable, net of discounts $ 556,116 $ 148,584 Debt Discount In the years ended December 31, 2014 and 2014, the Company recorded interest expense pertaining to debt discount on our convertible note in the amounts of $906,525 and $255,230. As of December 31, 2014 and 2013, the Company has a debt discount balance in the amounts of $339,934 and $113,361. Accrued Interest As of December 31, 2014 and 2013, the Company has an accrued interest balance pertaining to its outstanding liabilities in the amounts $67,907 and $11,695, respectively. Derivative liability The conversion feature included in our outstanding convertible promissory notes constitute a derivative and have been bifurcated from the note and recorded as a derivative liability, with a corresponding discount recorded to the associated debt on the accompany balance sheet. The Company calculates the derivative liability using the Black Scholes Model which takes into consideration the stock price on the grant date, exercise price with discount to market conversion rate, stock volatility, expected life of the note, risk-free rate, annual rate of quarterly dividends, call option value and put option value. As of December 31, 2014 and December 31, 2013, the Company had $1,564,098 and $994,778 in derivative liability pertaining to the outstanding convertible notes. The following is the range of variables used in revaluing the derivative liabilities at December 31, 2014 and December 31, 2013: December 31, December 31, Annual dividend yield 0 0 Expected life (years) of 0.01 – .95 0.01 – .90 Risk-free interest rate 10 % 10 % Expected volatility 563.9 % 373.4 % |
