| Convertible Notes Payable | NOTE 7 - CONVERTIBLE NOTES PAYABLE Christopher Thompson 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 notes principle and accrued
interest may at any time be converted into shares of the Companys stock at a conversion rate equal to 60% of the lowest
closing bid price in the ten days prior to conversion. On March 15, 2015, Christopher Thompson and Atlas Long Term Growth Fund
(Atlas) executed a purchase and assignment agreement whereby Christopher Thompson assigned $30,000 in total to Atlas, which included
the $15,000 note dated May 1, 2014. This resulted in a zero debt balance as of September 30, 2015. 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 notes principle and accrued interest may be converted into
shares of the Companys stock at a conversion rate equal to 60% of the lowest closing bid price in the ten days prior to
conversion. On March 15, 2015, Christopher Thompson and Atlas Long Term Growth Fund (Atlas) executed a purchase and assignment
agreement whereby Christopher Thompson assigned $30,000 in total to Atlas, which included the $15,000 note dated July 1, 2014.
This resulted in a zero debt balance as of September 30, 2015. 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 notes principle and accrued interest may be converted
into shares of the Companys stock at a conversion rate equal to 60% of the lowest closing bid price in the ten days prior
to conversion. In the nine months ended September 30, 2015, the Company paid $2,500 cash toward this note which left a balance
of 27,500. 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 notes principle and accrued interest may be converted
into shares of the Companys stock at a conversion rate equal to 60% of the lowest closing bid price in the ten days prior
to conversion. As of September 30, 2015, there has been no debt converted on this note. 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 notes principle and accrued interest may be converted into shares of the Companys stock at a conversion
rate equal to 60% of the lowest closing bid price in the fifteen days prior to conversion. As of September 30, 2015, there has
been $15,890 of principle converted into 15,451,383 post reverse split shares of common stock, leaving a balance of $14,759. 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 notes principle and accrued interest be converted into shares of the Companys stock at
a conversion rate equal to 55% of the lowest closing bid price in the fifteen days prior to conversion. As of September 30, 2015,
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 notes principle and
accrued interest may be converted into shares of the Companys 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 September 30, 2015, JMJ Financial has converted $18,566 of principle into 12,459,000 post reverse split shares of common stock
resulting in a balance of $93,434. 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 September 30, 2015, as permitted by the court order
and the Settlement Agreement and Stipulation, the Company has issued 9,180,000 post reverse split shares to IBC LLC for the conversion
of $144,070, leaving a balance of $70,071. The shares were issued free of any restrictions as permitted by Section 3(a)(10) of
the Securities Act. WHC Capital, LLC 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 notes principle and accrued interest may be converted into shares of the Companys stock at a conversion
rate equal to 55% of the lowest closing bid price in the fifteen days prior to conversion. As of September 30, 2015, there has
been $8,421 of principle converted into 5,130,010 post reverse split shares of our common stock, leaving a balance of $13,528.
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 notes principle
and accrued interest may be converted into shares of the Companys stock at a conversion rate equal to 55% of the lowest
closing bid price in the fifteen days prior to conversion. As of September 30, 2015, 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 notes principle and accrued interest may be converted into common shares of the Companys
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 September 30, 2015, 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 notes principle and accrued interest may be converted into common shares of the Companys
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 September 30, 2015, 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 notes principle and accrued interest may be converted into shares of the Companys stock at a conversion
rate equal to 50% of the lowest closing bid price in the fifteen days prior to conversion. As of September 30, 2015, ADAR BAYS,
LLC converted $900 of principle into 360,000 reverse stock split shares, leaving a note balance of $29,100. 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 notes principle and accrued interest may be converted into shares of the Companys stock at
a conversion rate equal to 55% of the lowest closing bid price in the ten days prior to conversion. As of September 30, 2015, KBM
converted $6,440 of principle into 4,583,227 reverse stock split shares of common stock, leaving a balance of $56,560. 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
notes principle and accrued interest may be converted into shares of the Companys 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 September 30, 2015, 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 notes principle and accrued interest may be converted into shares of the Companys
stock at a conversion rate equal to 50% of the lowest closing bid price in the twenty days prior to conversion. As of September
30, 2015, there have 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 notes principle and accrued interest may
be converted into common shares of the Companys 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 September 30, 2015, Beaufort has converted $3,619 of debt on
this note into 6,498,094 post reverser split shares of common stock, leaving a balance $73,856. 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 notes principle and accrued interest may be converted into shares of the Companys
stock at a conversion rate equal to 50% of the lowest closing bid price in the twenty days prior to conversion. As of September
30, 2015, there has been no debt converted on this note. 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. In the three months ended September 30, 2015, Sojourn converted $285 of principle into 3,625,000 reverse
stock split shares of common stock, leaving a balance of $36,145. 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 September 30, 2015, 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 notes principle and accrued interest may be converted into shares of the Companys
stock at a conversion rate equal to 50% of the lowest closing bid price in the twenty (20) days prior to conversion. In the nine
months ended September 30, 2015, Ambrosial assigned $20,000 to Carebourn Capital, L.P., leaving a principle balance of $47,250. Atlas Long Term Growth Fund On March 15, 2015, Christopher Thompson and
Atlas Long Term Growth Fund (Atlas) executed a purchase and assignment agreement whereby Christopher Thompson assigned $30,000
of convertible debt to Atlas which pertains to a convertible note payable dated July 1, 2014, entered into by Christopher Thompson.
The convertible promissory note has interest at 9.9% per annum, unsecured, and is due July 1, 2015. The convertible notes
principle and accrued interest may be converted into shares of the Companys stock at a conversion rate equal to 60% of the
lowest closing bid price in the ten days prior to conversion. In the nine months ended September 30, 2015, Atlas converted $1,744
of debt into 5,789,845 post reverse split shares of common stock. As of September 30, 2015, there was a balance of $28,256 on this
convertible note. Carebourn Capital, L.P. On March 13, 2015, Carebourn Capital, L.P.
entered into a purchase and assignment agreement with Brent Denlinger, holder of a $15,000 convertible promissory note with the
Company, to purchase and assign the note in full which included accrued interest of $1,554. The original note bears interest of
9.9% per annum and has a maturity date of April 16, 2015. The convertible notes principle and accrued interest may be converted
into shares of the Companys stock at a conversion rate equal to 60% of the lowest closing bid price in the ten days prior
to conversion. As of September 30, 2015, no principle has been converted on this note. On March 13, 2015, Carebourn Capital, L.P.
entered into a purchase and assignment agreement with Ambrosial Consulting Group LLC, holder of a $20,000 convertible promissory
note with the Company, to purchase and assign the note in full. The original note bears interest of 9.9% per annum and has a maturity
date of May 15, 2015. The convertible notes principle and accrued interest may be converted into shares of the Companys
stock at a conversion rate equal to 60% of the lowest closing bid price in the ten days prior to conversion. In the nine months
ended September 30, 2015, Carebourn converted $15,486 of convertible debt into 46,138,842 post reverse split shares of common stock,
leaving a balance on the note of $4,514. On March 19, 2015 the Company entered into
a securities purchase agreement and convertible promissory note with Carebourn Capital, L.P., a Delaware limited partnership, for
the sum of $41,500. The Company received $35,000 cash with the remaining $6,500 being classified as original issue discount. The
note bears interest of 12% per annum, matures on December 19, 2015 and may be converted into shares of the Company at a conversion
rate of 50% multiplied by average of the lowest three (3) trading prices ten (10) trading days prior to the conversion date. As
of September 30, 2015, no principle has been converted on this note. Darling Capital, LLC On April 1, 2015, the Company issued a replacement
convertible promissory note to Darling Capital, LLC in the amount of $33,000 plus accrued interest of $3,119. Darling Capital,
LLC purchased a portion of a convertible promissory note dated April 1, 2014 issued to Anibus Capital Partners in the original
amount of $127,900. The replacement convertible promissory note bears interest of 10% per annum and is due on July 12, 2015. The
convertible notes principle and accrued interest may be converted into shares of the Companys stock at a conversion
rate equal to 50% of the lowest closing bid price in the twenty days prior to conversion. In the nine months ended September 30,
2015, Darling Capital, LLC converted $3,443 of convertible debt into 130,053,194 post reverse split shares of common stock, leaving
a balance on the note of $29,557. The following table summarizes the total outstanding
principle on convertible notes payable:
September 30, 2015 December 31, 2014
Convertible Notes Payable- Asher Enterprises, Inc. $ 300 $ 300
Convertible Notes Payable - Tangier Investors, LLP
Convertible Note Payable- Premier Venture Partners LLC
Convertible Note Payable- Dennis Pieczarka 2,500 2,500
Convertible Note payable - Christopher Thompson 57,500 90,000
Convertible Note payable - James Ault 2,565 2,565
Convertible Note payable - Charles Knoop 1,000 1,000
Convertible Note payable - LG Capital Funding 54,527 58,555
Convertible Note payable - JMJ Financial 93,434 98,020
Convertible Note payable - IBC Funds, LLC 54,901 71,071
Convertible Note payable - WHC Capital, LLC 18,689 21,077
Convertible Note payable - ADAR BAYS, LLC 29,100 30,000
Convertible Note payable - Brent Delinger 15,000
Convertible Note payable - Jessie Redmayne 5,000 5,000
Convertible Note payable - Jennifer Salwender 40,000 40,000
Convertible Note payable - Anibus Capital Partners 114,900 147,900
Convertible Note payable - Beaufort Capital Partners, LLC 135,333 137,812
Convertible Note payable - KBM Worldwide 56,560 63,000
Convertible Note payable - Sojourn Investments, LP 43,645 45,000
Convertible Note payable - Ambrosial Consulting Group 47,250 67,250
Convertible Note payable - Carebourn Capital, L.P. 51,970
Convertible Note payable - Darling Capital, LLC 29,557
Convertible Note payable - Atlas Long Term Growth Fund 20,327
Less: Debt discount (147,433 ) (339,934 )
Total Convertible Notes Payable, net of discounts $ 711,625 $ 556,116 Debt Discount In the nine months ended September 30, 2015
and 2014, the Company recorded interest expense pertaining to debt discount on our convertible note in the amounts of $278,501
and $453,263. As of September 30, 2015 and December 31, 2014, the Company has a debt discount balance in the amounts of $147,433
and $339,934. Accrued Interest As of September 30, 2015 and December 31, 2014,
the Company has an accrued interest balance pertaining to its outstanding liabilities in the amounts $123,623 and $67,907, 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 September 30, 2015 and December 31, 2014,
the Company had $922,017 and $1,564,098 in derivative liability pertaining to the outstanding convertible notes. The following is the range of variables used
in revaluing the derivative liabilities at September 30, 2015 and December 31, 2014:
September 30, 2015 December 31, 2014
Annual dividend yield 0 0
Expected life (years) of 0.01 .65 0.01 .95
Risk-free interest rate 13 % 13 %
Expected volatility 461.8 % 563.9 % |
