Convertible Notes Payable | 3 Months Ended |
Mar. 31, 2014 |
Debt Disclosure [Abstract] | ' |
Convertible Notes Payable | ' |
NOTE 10 - CONVERTIBLE NOTES PAYABLE |
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Asher Enterprises, Inc. |
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As of March 31, 2014, the Company has four convertible notes outstanding to Asher Enterprises, Inc. with a combined principle balance of $152,500. |
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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. |
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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. |
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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. |
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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 March 31, 2014, there has been no conversion of debt pertaining to this outstanding convertible promissory note. |
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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 March 31, 2014, there has been no conversion of debt pertaining to this outstanding convertible promissory note. |
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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 March 31, 2014, there has been no conversion of debt pertaining to this outstanding convertible promissory note. |
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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 March 31, 2014, there has been no conversion of debt pertaining to this outstanding convertible promissory note. |
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In the three months ended March 31, 2014, Asher converted $98,510 of convertible notes payable into 61,958,516 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. |
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Tangier Investors LLP |
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On May 16, 2011, the Company entered into an agreement with Tangiers Investors, LP, a Delaware limited partnership, an accredited investor, whereby Tangiers Investors loaned the Company the aggregate principal amount of $50,000, less $500 for costs of the loan transaction and $4,000 fee to be paid to a third party, together with any interest at the rate of seven percent (7%) per annum, until the maturity date of May 7, 2012. The original issue discount note, as described in ASC 480-55, may not be prepaid in whole or in part. If the Note is not paid in full with interest on the maturity date, the note holder has the right to convert this Note into restricted common shares of the Company. The conversion price shall equal the “Variable Conversion Price” (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower). The “Variable Conversion Price” shall mean 75% multiplied by the Market Price (representing a discount rate of 25%). “Market Price” means the lowest 11 trading price for the Common Stock during the seven (7) Trading Day period ending one Trading Day prior to the date the Conversion Notice is sent by the Holder to the Borrower via facsimile. In November of 2012 Tangier Investors LLP agreed to extend the terms of the convertible note for 5,000 common shares paid as consideration by the Company. This allowed the maturity date to be delayed until January 25, 2013. |
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Tangier Investors LLP exercised their conversion rights to convert $30,000 of convertible notes payable into 160,000 common shares. The remaining balance was paid in full as of December 31, 2013. |
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Premier Venture Partners, LLC (“Premier”) |
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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”. |
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The sum of the claim amount plus a 10% settlement fee and plaintiff’s reasonable attorney fees and expenses were calculated as follows: |
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Claim amount | | $ | 63,063 | | | | | |
10% settlement fee | | | 6,306 | | | | | |
Attorney fees | | | 5,770 | | | | | |
Total | | | 75,139 | | | | | |
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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 three months ended March 31, 2014, the Company issued 25,693,824 common shares to Premier pursuant to the court ordered settlement. As of March 31, 2014, the Company must issue approximately 32,974,215 additional common shares to Premier to settle the court order. |
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In the year ended December 31, 2013, the Company has issued 7,243,417 common shares to Premier and was required to issue an additional 58,668,039 shares of common stock in the Company. |
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Dennis Pieczarka |
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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. |
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Christopher Thompson |
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On April 1, 2013, the Company entered into a Securities Purchase Agreement with Christopher Thompson for a $10,000 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. |
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Michael Lace |
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On June 26, 2013, the Company entered into a Securities Purchase Agreement with Michael Lace for a $2,800 note payable due interest at 9% per annum, unsecured, and due June 26, 2014. The note is convertible into common shares of the Company at a conversion rate of $.05per share. In the year ended December 31, 2013, Mr. Lace exercised his conversion rights to convert $2,800 of convertible debt and $11 of accrued interest into 56,221 common shares. |
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Charles Knoop |
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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 $.095per share. |
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Balamurugan Shanmugam |
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On August 8, 2013, the Company entered into a Securities Purchase Agreement with Balamurugan Shanmugam for a $5,000 note payable due interest at 9% per annum, unsecured, and due August 8, 2014. The note is convertible into common shares of the Company at a conversion rate of $.10per share. On September 26, 2013, Balamurugan exercised his right to convert his $5,000 of convertible debt and $60 of accrued interest into 50,604 common shares. |
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LG Capital Funding |
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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 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 fifteen days prior to conversion. As of March 31, 2014, there has been no debt converted on this note. |
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JMJ Financial |
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On March 15, 2014, the Company entered into a convertible promissory note with JMJ Financial for up to $500,000 with 0% for the first three months, then 12% per annum thereafter. 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 twenty-five days prior to conversion. As of March 31, 2014, the Company has received only $30,000 pursuant to this convertible promissory note. There has been no principle converted as of March 31, 2014. |
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The following table summarizes the total outstanding principle on convertible notes payable: |
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| | 31-Mar-14 | | 31-Dec-13 |
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Convertible Notes Payable- Asher Enterprises, Inc. | | $ | 152,500 | | | $ | 228,510 | |
Convertible Notes Payable - Tangier Investors, LLP | | | — | | | | — | |
Convertible Note Payable- Premier Venture Partners LLC | | | 9,763 | | | | 17,370 | |
Convertible Note Payable- Dennis Pieczarka | | | 2,500 | | | | 2,500 | |
Convertible Note payable - Christopher Thompson | | | 10,000 | | | | 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 | | | 32,000 | | | | — | |
Convertible Note payable - JMJ Financial | | | 30,000 | | | | — | |
Total | | $ | 240,328 | | | $ | 261,945 | |
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The accrued interest on convertible notes payable at March 31, 2014 and December 31, 2013 was $20,916 and 11,659, respectively. |
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Derivative liability |
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At March 31, 2014 and December 31, 2013, the Company had $8,358,363 and 21,876,947 in derivative liability pertaining to the outstanding convertible notes. 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. |