Convertible Debt | 12 Months Ended |
Dec. 31, 2014 |
Convertible Debt [Abstract] | |
CONVERTIBLE DEBT | 8. CONVERTIBLE DEBT |
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Asher Enterprises, Inc. |
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On June 3, 2013 Powerdyne International entered into an agreement for the sale of a Convertible Promissory Note (“Asher Note 1”) in the principal amount $42,500 with an interest rate of 8% per annum pursuant to the terms of a Securities Purchase Agreement between Asher Enterprises, Inc. (“Asher”), a Delaware corporation, and Powerdyne International Inc. The Asher Note 1 closed on June 5, 2013 and matures on March 6, 2014. After 180 days, the Investor/Lender has the option of converting some or all principal and accrued interest into common shares of the Company. The conversion rate is 58% of the average of the lowest three trading day prices of the Company during the ten trading day period prior to the conversion date. The Company analyzed the conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the instrument should be classified as a liability once the conversion option becomes effective, since there is no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. |
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On December 10, 2013 the Investor/Lender exercised its right to convert $15,000 of the Asher Note 1into into 1,190,476 common shares. The Company has determined that the conversion feature is considered an embedded beneficial conversion feature and thereby creates a derivative liability for the Company. On the date of conversion, the Company calculated the value of the derivative liability using the weighted-average Black-Scholes option pricing model, which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 506.82%; (iii) risk free rate of 0.13%, (iv) expected term of 3 months, (v) market value share price of $0.022, and (vi) per share conversion price of $0.0126. Based upon this model, the Company determined an initial derivative liability value of $62,131, which it recorded as a derivative liability as of the date of issuance while also recording a $15,000 non-cash amortization expense of debt discount and a $42,500 debt discount on its balance sheet in relation to the derivative liability of this note. This conversion produced an increase in additional paid in capital of $24,754 and a decrease in the derivative liability by the same amount. In addition, the Company recorded a derivative expense of $19,631, and a change in fair value of derivative of $8,004 during the year ended December 31, 2014. |
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On December 31, 2013, the Company revalued the derivative value of the $42,500 8% Note using the weighted-average Black-Scholes option pricing model with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 483.43%; (iii) risk free rate of 0.13%, (iv) expected term of 2 months, (v) market value share price of $0.184, and (vi) per share conversion price of $0.00998. The Company determined the derivative value to be $47,494 as of December 31, 2013, which represents a change in the fair value of the derivative in the amount of $2,113 as compared to the derivative value on December 10, 2013. Accordingly, the Company recorded a non-cash change in fair value of the derivative liability of $2,113 while also increasing the derivative liability from $45,383 to $47,494 as of December 31, 2013. Also recorded for that period was an amortization of debt discount of $2,750. The derivative liability balance as of December 31, 2013 was $47,494 and the debt discount balance as of December 31, 2013 was $24,750. |
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On February 13, 2014, the Investor/Lender exercised its right to convert an additional $12,000 of the Asher Note 1 (the second conversion of this note) into 1,714,286 common shares. The Company has determined that the conversion feature is considered an embedded beneficial conversion feature and thereby creates a derivative liability for the Company. On the date of conversion, the Company calculated the value of the derivative liability using the weighted-average Black-Scholes option pricing model, which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 455.63%; (iii) risk free rate of 0.12%, (iv) expected term of 6 months, (v) market value share price of $0.0143, and (vi) per share conversion price of $0.007. Based upon this model, the Company determined an initial derivative liability value of $62,131, which it recorded as a derivative liability as of the date of issuance while also recording a $15,000 non-cash amortization expense of debt discount and a $42,500 debt discount on its balance sheet in relation to the derivative liability of this note. This conversion produced an increase in additional paid in capital of $23,112 and a decrease in the derivative liability by the same amount. In addition, the Company recorded an amortization of debt discount of $12,000 and a reduction of debt discounts of the same amount. There was also an increase in the change in fair value of the derivative liability of $549 while also producing an increase in the derivative liability by the same amount. |
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On March 31, 2014, the Company revalued the derivative value of the $42,500 8% Note using the weighted-average Black-Scholes option pricing model with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 353.85%; (iii) risk free rate of 0.12%, (iv) expected term of 6 months, (v) market value share price of $0.015, and (vi) per share conversion price of $0.0059. The Company determined the derivative liability value to be $34,509 as of March 31, 2014, which represents a change in the fair value of the derivative in the amount of $9,093 as compared to the derivative value on February 13, 2014. Accordingly, the Company recorded a non-cash change in fair value of the derivative liability of $9,093 while also increasing the derivative liability from $25,315 to $34,509 as of March 31, 2014. Also recorded for that period was an amortization of debt discount in the amount of $4,650. The derivative liability balance as of March 31, 2014 and December 31, 2013 was $34,509 and $47,494, respectively. The debt discount balance as of March 31, 2014 and December 31, 2013 was $29,299 and $24, 750, respectively. |
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On April 10, 2014, the Investor/Lender exercised its right to convert the balance of the Asher Note 1 loan amount of $15,500 plus $1,700 of accrued and unpaid interest of the Note 1 (the third conversion of this note) into 3,659,574 common shares. The Company has determined that the conversion feature is considered an embedded conversion feature and thereby creates a derivative liability for the Company. On the date of conversion, the Company calculated the value of the derivative liability using the weighted-average Black-Scholes option pricing model, which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 352.69%; (iii) risk free rate of 0.09%, (iv) expected term of 6 months, (v) market value share price of $0.0121, and (vi) per share conversion price of $0.0047. This conversion produced an increase in additional paid in capital of $38,666 and a decrease in the derivative liability by the same amount. In addition, the Company recorded an amortization of debt discount of $15,500 and a reduction of debt discounts of the same amount. There was also an increase in the change in fair value of the derivative liability of $4,258 while also producing an increase in the derivative liability by the same amount. This note was fully converted into common stock as of April 10, 2014. Accordingly, the Company recorded a non-cash change in fair value of the derivative liability of $4,258 while also decreasing the derivative liability from $38,666 to $-0- as of December 31, 2014. Also recorded for that period was an amortization of debt discount of $24,750. The derivative liability balance as of December 31, 2014 and 2013 was $-0- and $47,473, respectively. The debt discount balance as of December 31, 2014 and 2013 was $-0- and $24,750, respectively. |
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On August 27, 2013 Powerdyne International entered into an agreement for the sale of a Convertible Promissory Note (“Asher Note 2”) in the principal amount $32,500 with an interest rate of 8% per annum pursuant to the terms of a Securities Purchase Agreement between Asher and Powerdyne International Inc. The Asher Note 2 closed on August 29, 2013 and matures on May 29, 2014. This Note 2 is convertible at 58% of the average of the lowest three trading prices of Powerdyne’s common stock during the ten trading day period prior to the conversion date after 180 days. Powerdyne analyzed the conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the instrument should be classified as a liability once the conversion option becomes effective after 180 days due to there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. |
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On May 12, 2014 the Investor/Lender exercised its right to convert $15,000 of the Asher Note 2 into 5,769,231 common shares. The Company has determined that the conversion feature is considered an embedded conversion feature and thereby creates a derivative liability for the Company. On the date of conversion, the Company calculated the value of the derivative liability using the weighted-average Black-Scholes option pricing model, which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 262.20%; (iii) risk free rate of 0.09%, (iv) expected term of 6 months, (v) market value share price of $0.0040, and (vi) per share conversion price of $0.0026. This conversion produced an increase in additional paid in capital of $16,582 and a decrease in the derivative liability by the same amount. There was also a decrease in the change in fair value of the derivative liability of $36,261 while also producing a decrease in the derivative liability by the same amount. In addition, the Company recorded an amortization of debt discount of $15,000 and a reduction of debt discounts of the same amount. |
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On May 21, 2014 the Investor/Lender exercised its right to convert the balance of the Asher Note 2 loan amount of $17,500 plus $1,300 of accrued and unpaid interest of the Note 2 into 8,952,381 common shares. The Company has determined that the conversion feature is considered an embedded conversion feature and thereby creates a derivative liability for the Company. On the date of conversion, the Company calculated the value of the derivative liability using the weighted-average Black-Scholes option pricing model, which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 271.35%; (iii) risk free rate of 0.08%, (iv) expected term of 6 months, (v) market value share price of $0.0060, and (vi) per share conversion price of $0.0021. This conversion produced an increase in additional paid in capital of $43,780 and a decrease in the derivative liability by the same amount. There was also an increase in the change in fair value of the derivative liability of $24,434 while also producing an increase in the derivative liability by the same amount. In addition, the Company recorded an amortization of debt discount of $17,500 and a reduction of debt discounts of the same amount. This note was fully converted into common stock as of May 21, 2014. Accordingly, the Company recorded a non-cash change in fair value of the derivative liability of $24,434 while decreasing the derivative liability from $43,780 to $-0- as of December 31, 2014. Also recorded for that period was an amortization of debt discount of $17,500, and total amortization of debt discount for the year was $32,500. The derivative liability balance as of December 31, 2014 and 2013 was $-0- and $-0-, respectively. The debt discount balance as of December 31, 2014 and 2013 was $-0- and $-0-, respectively. |
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On October 2, 2013 Powerdyne International entered into an agreement for the sale of a Convertible Promissory Note (“Asher Note 3”) in the principal amount $32,500 with an interest rate of 8% per annum pursuant to the terms of a Securities Purchase Agreement between Asher and Powerdyne International. This Note closed on October 7, 2013 and matures on July 7, 2014. The Note is convertible at 58% of the average of the lowest three trading prices of Powerdyne’s common stock during the ten trading day period prior to the conversion date after 180 days. |
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On May 27, 2014 the Investor/Lender exercised its right to convert $15,000 of the Asher Note 3 into 7,142,857 common shares. The Company has determined that the conversion feature is considered a beneficial conversion feature and thereby creates a derivative liability for the Company. On the date of conversion, the Company calculated the value of the derivative liability using the weighted-average Black-Scholes option pricing model, which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 350.42%; (iii) risk free rate of 0.08%, (iv) expected term of 6 months, (v) market value share price of $0.0042, and (vi) per share conversion price of $0.0021. Based upon this model, the Company determined an initial derivative liability value of $46,126, which it recorded as a derivative liability as of the date of issuance while also recording a derivative expense of $13,626 and a $32,500 debt discount on its balance sheet in relation to the derivative liability of this note. This conversion produced an increase in additional paid in capital of $23,658 and a decrease in the derivative liability by the same amount. There was also an increase in the change in fair value of the derivative liability of $5,134 while also producing an increase in the derivative liability by the same amount. In addition, the Company recorded an amortization of debt discount of $15,000 and a reduction of debt discounts of the same amount. |
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On June 4, 2014 the Investor/Lender exercised its right to convert the balance of the loan amount of $17,500 plus $1,300 of accrued and unpaid interest of the Asher Note 3 into 10,444,444 common shares. The Company has determined that the conversion feature is considered an embedded conversion feature and thereby creates a derivative liability for the Company. On the date of conversion, the Company calculated the value of the derivative liability using the weighted-average Black-Scholes option pricing model, which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 317.81%; (iii) risk free rate of 0.10%, (iv) expected term of 6 months, (v) market value share price of $0.0029, and (vi) per share conversion price of $0.0018. This conversion produced an increase in additional paid in capital of $24,137 and a decrease in the derivative liability by the same amount. There was also an increase in the change in fair value of the derivative liability of $3,465 while also producing an increase in the derivative liability by the same amount. In addition, the Company recorded an amortization of debt discount of $17,500 and a reduction of debt discounts of the same amount. This note was fully converted into common stock as of June 4, 2014. Accordingly, the Company recorded a non-cash change in fair value of the derivative liability of $3,465 while decreasing the derivative liability from $24,137 to $-0- as of December 31, 2014. Also recorded for that period was an amortization of debt discount of $17,500, and total amortization of debt discount for the year was $32,500. The derivative liability balance as of December 31, 2014 and 2013 was $-0- and $-0-, respectively. The debt discount balance as of December 31, 2014 and 2013 was $-0- and $-0-, respectively. |
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Powerdyne analyzed the conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the instrument should be classified as a liability once the conversion option becomes effective after 180 days due to there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. |
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JMJ Financial |
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On December 11, 2013, the Company entered into an agreement with an another unrelated party in order to obtain short term cash flow in the form of a $25,000, ten (10) percent convertible Note Payable. Interest accrues at zero (0) percent for the first three months and if the borrower does not repay a payment of consideration on or before 90 days from its Effective Date, a one time interest charge of 12% shall be applied to the principal sum. The maturity date is two years from the effective date of the Note Payable. The lender has the right to convert some or all of the Note Payable into common stock of the Company at a discount rate of $0.022 or 60% of market, whichever is less. As a result of the convertible note payable, the Company realized the derivative nature of those instruments. Accordingly, the Company recognized following charges to operations: derivative expense of $14,202 and amortization of debt discounts of $719. Furthermore, the Company recognized derivative liabilities in the amount of $39,201 and debt discounts in the amount of $24,281 which is amortized. |
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On December 31, 2013, the Company revalued the derivative value of the $25,000 10% Note using the weighted-average Black-Scholes option pricing model with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 483.43%; (iii) risk free rate of 0.13%, (iv) expected term 1 year, (v) market value share price of $0.184, and (vi) per share conversion price of $0.00912. The Company determined the derivative value to be $47,381 as of December 31, 2013, which represents a change in the fair value of the derivative in the amount of $8,179 as compared to the derivative value on December 11, 2013. Accordingly, the Company recorded a non-cash change in fair value of the derivative liability of $8,179 while also increasing the derivative liability from $39,202 to $47,381 as of December 31, 2013. Also recorded for that period was an amortization of debt discount of $719. |
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On March 31, 2014, the Company revalued the derivative value of the $25,000 10% Note using the weighted-average Black-Scholes option pricing model with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 273.63%; (iii) risk free rate of 0.12%, (iv) expected term of 1 year, (v) market value share price of $0.015, and (vi) per share conversion price of $0.00306. The Company determined the derivative value to be $106,994 as of March 31, 2014, which represents a change in the fair value of the derivative in the amount of $59,614 as compared to the derivative value on December 11, 2013. Accordingly, the Company recorded a non-cash change in fair value of the derivative liability of $59,614 while also increasing the derivative liability from $47,381 to $106,994 as of March 31, 2014. Also recorded for that period was an amortization of debt discount of $3,082. |
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On June 11, 2014 the Investor/Lender exercised its right to convert $8,550 of the Note into 7,500,000 common shares. The Company has determined that the conversion feature is considered an embedded conversion feature and thereby creates a derivative liability for the Company. On the date of conversion, the Company calculated the value of the derivative liability using the weighted-average Black-Scholes option pricing model, which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 305.24%; (iii) risk free rate of 0.10%, (iv) expected term of 1 year, (v) market value share price of $0.0027, and (vi) per share conversion price of $0.00114. This conversion produced an increase in additional paid in capital of $16,718 and a decrease in the derivative liability by the same amount. There was also a decrease in the change in fair value of the derivative liability of $52,245 producing a decrease in the derivative liability by the same amount. In addition, the Company recorded an amortization of debt discount of $8,550 and a reduction of debt discounts of the same amount. |
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On June 30, 2014, the Company revalued the derivative value of the $25,000 10% Note using the weighted-average Black-Scholes option pricing model with the following assumptions; (i) dividend yield of 0%; (ii) expected volatility of 312.32%; (iii) risk free rate of 0.11%, (iv) expected term of 1 year, (v) market value share price of $0.0022, and (vi) per share conversion price of $0.0012. The Company determined the derivative value to be $28,711 as of June 30, 2014, which represents a change in the fair value of the derivative in the amount of $9,320 as compared to the derivative value on June 11, 2014. Accordingly, the Company recorded a non-cash change in fair value of the derivative liability of $9,320 while also increasing the derivative liability by the same amount. |
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On August 11, 2014 the Investor/Lender exercised its right to convert $12,444 of the Note into 12,200,000 common shares. The Company has determined that the conversion feature is considered an embedded conversion feature and thereby creates a derivative liability for the Company. On the date of conversion, the Company calculated the value of the derivative liability using the weighted-average Black-Scholes option pricing model, which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 408.20%; (iii) risk free rate of 0.10%, (iv) expected term of 1year, (v) market value share price of $0.0089, and (vi) per share conversion price of $0.00102. This conversion produced an increase in additional paid in capital of $104,008 and a decrease in the derivative liability by the same amount. There was also an increase in the change in fair value of the derivative liability of $159,857 producing an increase in the derivative liability by the same amount. |
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On September 17, 2014 the Investor/Lender exercised its right to the balance of the loan amount of $4,006 plus $4,442 of accrued and unpaid interest of the Note into 12,800,000 common shares. The Company has determined that the conversion feature is considered an embedded conversion feature and thereby creates a derivative liability for the Company. On the date of conversion, the Company calculated the value of the derivative liability using the weighted-average Black-Scholes option pricing model, which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 380.81%; (iii) risk free rate of 0.12%, (iv) expected term of 1 year, (v) market value share price of $0.0032, and (vi) per share conversion price of $0.00066. This conversion produced an increase in additional paid in capital of $37,981 and a decrease in the derivative liability by the same amount. There was also a decrease in the change in fair value of the derivative liability of $39,075 producing a decrease in the derivative liability by the same amount. |
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On September 30, 2014, the Company revalued the derivative value of the $1,669 10% Note using the weighted-average Black-Scholes option pricing model with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 403.21%; (iii) risk free rate of 0.13%, (iv) expected term of 1 year, (v) market value share price of $0.007, and (vi) per share conversion price of $0.00144. The Company determined the derivative value to be $7,600 as of September 30, 2014, which represents a change in the fair value of the derivative in the amount of $96 as compared to the derivative value on September 17, 2014. Accordingly, the Company recorded a non-cash change in fair value of the derivative liability of $96 while also increasing the derivative liability by the same amount. |
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On December 31, 2014, the Company revalued the derivative value of the $1,669 10% Note using the weighted-average Black-Scholes option pricing model with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 330.81%; (iii) risk free rate of 0.25%, (iv) expected term of 1 year, (v) market value share price of $0.0012, and (vi) per share conversion price of $0.003. The Company determined the derivative value to be $6,339 as of December 31, 2014, which represents a decrease in the fair value of the derivative in the amount of $1,261 as compared to the derivative value on September 30, 2014. Accrued interest at December 31, 2014 and December 31, 2013 was $1,669 and $0, respectively. Accordingly, the Company recorded a non-cash decrease in fair value of the derivative liability of $1,261 while also decreasing the derivative liability from $7,600 to $-0- as of December 31, 2014. The derivative liability balance as of December 31, 2014 and 2013 was $6,339 and $47,381, respectively. The debt discount balance as of December 31, 2014 and 2013 was $-0- and $24,281, respectively. |
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On August 20, 2014, the note with the Investor/Lender was amended allowing the Company to borrow additional funds from the Investor/Lender in order to obtain short term cash flow in the amount of $40,000 (“JMJ Note 2”), and the Company did borrow said amount of funds on September 4, 2014. The terms of the original note remain the same. As a result of the additional convertible note payable, the Company realized the derivative nature of those instruments. Accordingly, the Company recognized the derivative expense of $401,991, derivative liabilities in the amount of $441,991, and debt discounts in the amount of $40,000 which will be amortized throughout the term of the note. |
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On September 30, 2014, the Company revalued the derivative value of the $40,000 10% Note using the weighted-average Black-Scholes option pricing model with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 392.24%; (iii) risk free rate of 0.13%, (iv) expected term of 1 year, (v) market value share price of $0.007, and (vi) per share conversion price of $0.00144. The Company determined the derivative value to be $225,582 as of September 30, 2014, which represents a decrease in the fair value of the derivative in the amount of $216,409 as compared to the derivative value on August 20, 2014. Accordingly, the Company recorded a non-cash decrease in fair value of the derivative liability of $216,409 while also decreasing the derivative liability by the same amount. In addition, the Company recorded an amortization of debt discount of $2,244 and a reduction of debt discounts of the same amount. |
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On December 31, 2014, the Company revalued the derivative value of the $40,000 10% Note using the weighted-average Black-Scholes option pricing model with the following assumptions; (i) dividend yield of 0%; (ii) expected volatility of 388.80%; (iii) risk free rate of 0.12%, (iv) expected term of 1 year, (v) market value share price of $0.0012, and (vi) per share conversion price of $0.0003. The Company determined the derivative value to be $176,689 as of December 31, 2014, which represents a change in the fair value of the derivative in the amount of $48,893 as compared to the derivative value on September 30, 2014. Accordingly, the Company recorded a non-cash decrease in fair value of the derivative liability of $48,893 while also decreasing the derivative liability by the same amount. In addition, the Company recorded an amortization of debt discount of $5,034 and a reduction of debt discounts of the same amount. Accrued interest at December 31, 2014 and December 31, 2013 was $9,778 and $0, respectively. Accordingly, the Company recorded a non-cash decrease in fair value of the derivative liability of $48,893 while also decreasing the derivative liability from $225,582 to $176,689 as of December 31, 2014. Also recorded for that period was an amortization of debt discount of $5,034. The derivative liability balance as of December 31, 2014 and 2013 was $176,689 and $-0-, respectively. The debt discount balance as of December 31, 2014 and 2013 was $32,722 and $-0-, respectively. |
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LG Capital Funding, LLC |
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On May 8, 2014, the Company entered into an agreement with an another unrelated party in order to obtain short term cash flow in the form of a $30,000, eight (8) percent convertible Note Payable (“LG Note 1”). The maturity date is one year from the effective date of the Note Payable. The lender has the right to convert at 55% of the lowest trading price of the Company’s common stock during the twenty day period prior to the conversion date after 180 days. This note is secured by Company common stock. |
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On November 10, 2014 the Investor/Lender exercised its right to convert $4,000 plus $162 of accrued and unpaid interest of the Note 1 into 5,821,244 common shares. The Company has determined that the conversion feature is considered an embedded conversion feature and thereby creates a derivative liability for the Company. On the date of conversion, the Company calculated the value of the derivative liability using the weighted-average Black-Scholes option pricing model, which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 374.08%; (iii) risk free rate of 0.07%, (iv) expected term of 1 year, (v) market value share price of $0.0033, and (vi) per share conversion price of $0.00072. This conversion produced an increase in additional paid in capital of $17,677 and a decrease in the derivative liability by the same amount. There was also an increase in the change in fair value of the derivative liability of $32,237 producing an increase in the derivative liability by the same amount. |
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On December 31, 2014, the Company revalued the derivative value of the $26,000 8% Note using the weighted-average Black-Scholes option pricing model with the following assumptions; (i) dividend yield of 0%; (ii) expected volatility of 374.08%; (iii) risk free rate of 0.04%, (iv) expected term of 1 year, (v) market value share price of $0.0012, and (vi) per share conversion price of $0.00039. The Company determined the derivative value to be $69,604 as of December 31, 2014, which represents a decrease in the fair value of the derivative in the amount of $40,131 as compared to the derivative value on November 10, 2014. Accordingly, the Company recorded a non-cash decrease in fair value of the derivative liability of $40,131 while also decreasing the derivative liability by the same amount. In addition, the Company recorded an amortization of debt discount of $9,243 and a reduction of debt discounts of the same amount. Accrued interest at December 31, 2014 and December 31, 2013 was $2,203 and $0, respectively. Accordingly, the Company recorded a non-cash decrease in fair value of the derivative liability of $40,131 while also decreasing the derivative liability from $95,175 to $69,606 as of December 31, 2014 .Also recorded for that period was an amortization of debt discount of $9,243. The derivative liability balance as of December 31, 2014 and 2013 was $69,606 and $-0-, respectively. The debt discount balance as of December 31, 2014 and 2013 was $20,757 and $-0-, respectively. |
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On September 4, 2014, the Company entered into an agreement with the Investor/Lender (“LG Note 2”) in order to obtain short term cash flow in the form of a $26,500, eight (8) percent convertible Note Payable. The maturity date is one year from the effective date of the Note Payable. The lender has the right to convert at 55% of the lowest trading price of the Company’s common stock during the twenty day period prior to the conversion date after 180 days. As of December 31, 2014 this note has not yet met its 180 days criteria. This note is secured by Company common stock. |
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Adar Bays, LLC |
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On May 9, 2014, the Company entered into an agreement with an another unrelated party in order to obtain short term cash flow in the form of a $30,000, eight (8) percent convertible Note Payable. The maturity date is one year from the effective date of the Note Payable. The lender has the right to convert at 55% of the lowest closing bid price of the Company’s common stock during the twenty day period prior to the conversion date after 180 days. This note is secured by Company common stock. |
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On November 17, 2014 the Investor/Lender exercised its right to convert $1,000 of the Note into 1,212,121 common shares. The Company has determined that the conversion feature is considered an embedded conversion feature and thereby creates a derivative liability for the Company. On the date of conversion, the Company calculated the value of the derivative liability using the weighted-average Black-Scholes option pricing model, which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 369.49%; (iii) risk free rate of 0.07%, (iv) expected term of 6 months, (v) market value share price of $0.002, and (vi) per share conversion price of $0.00083. This conversion produced an increase in additional paid in capital of $2,119 and a decrease in the derivative liability by the same amount. There was also a decrease in the change in fair value of the derivative liability of $37,163 producing a decrease in the derivative liability by the same amount. |
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On November 24, 2014 the Investor/Lender exercised its right to convert $6,000 of the Note into 8,391,608 common shares. The Company has determined that the conversion feature is considered an embedded conversion feature and thereby creates a derivative liability for the Company. On the date of conversion, the Company calculated the value of the derivative liability using the weighted-average Black-Scholes option pricing model, which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 374.87%; (iii) risk free rate of 0.08%, (iv) expected term of 6 months, (v) market value share price of $0.0019, and (vi) per share conversion price of $0.00072. This conversion produced an increase in additional paid in capital of $14,016 and a decrease in the derivative liability by the same amount. There was also a change in fair value of the derivative liability of $6,586 producing an increase in the derivative liability by the same amount. |
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On December 1, 2014 the Investor/Lender exercised its right to convert $6,500 of the Note into 9,848,485 common shares. The Company has determined that the conversion feature is considered an embedded conversion feature and thereby creates a derivative liability for the Company. On the date of conversion, the Company calculated the value of the derivative liability using the weighted-average Black-Scholes option pricing model, which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 383.37%; (iii) risk free rate of 0.08%, (iv) expected term of 6 months, (v) market value share price of $0.0015, and (vi) per share conversion price of $0.00066. This conversion produced an increase in additional paid in capital of $12,819 and a decrease in the derivative liability by the same amount. There was also a decrease in the change in fair value of the derivative liability of $8,857 producing a decrease in the derivative liability by the same amount. |
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On December 4, 2014 the Investor/Lender exercised its right to convert $5,000 of the Note into 7,575,758 common shares. The Company has determined that the conversion feature is considered an embedded conversion feature and thereby creates a derivative liability for the Company. On the date of conversion, the Company calculated the value of the derivative liability using the weighted-average Black-Scholes option pricing model, which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 385.74%; (iii) risk free rate of 0.08%, (iv) expected term of 6 months, (v) market value share price of $0.0015, and (vi) per share conversion price of $0.00066. This conversion produced an increase in additional paid in capital of $9,850 and a decrease in the derivative liability by the same amount. There was also a decrease in the change in fair value of the derivative liability of $39 producing a decrease in the derivative liability by the same amount. |
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On December 11, 2014 the Investor/Lender exercised its right to convert $4,385 of the Note into 7,972,018 common shares. The Company has determined that the conversion feature is considered an embedded conversion feature and thereby creates a derivative liability for the Company. On the date of conversion, the Company calculated the value of the derivative liability using the weighted-average Black-Scholes option pricing model, which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 390.58%; (iii) risk free rate of 0.09%, (iv) expected term of 6 months, (v) market value share price of $0.0014, and (vi) per share conversion price of $0.00055. This conversion produced an increase in additional paid in capital of $9,738 and a decrease in the derivative liability by the same amount. There was also a change in fair value of the derivative liability of $3,223 producing an increase in the derivative liability by the same amount. |
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On December 17, 2014 the Investor/Lender exercised its right to the balance of the loan amount of $7,115 plus $1,344 of accrued interest of the Note into 15,380,327 common shares. The Company has determined that the conversion feature is considered an embedded conversion feature and thereby creates a derivative liability for the Company. On the date of conversion, the Company calculated the value of the derivative liability using the weighted-average Black-Scholes option pricing model, which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 376.95%; (iii) risk free rate of 0.11%, (iv) expected term of 6 months, (v) market value share price of $0.0013, and (vi) per share conversion price of $0.00055. This conversion produced an increase in additional paid in capital of $17,015 and a decrease in the derivative liability by the same amount. There was also a decrease in the change in fair value of the derivative liability of $1,772 producing a decrease in the derivative liability by the same amount. In addition, the Company recorded an amortization of debt discount of $30,000 and a reduction of debt discounts of the same amount. This note was fully converted into common stock as of December 17, 2014. Accordingly, the Company recorded a non-cash decrease in fair value of the derivative liability of $1,772 while also decreasing the derivative liability from $17015 to $-0- as of December 31, 2014. Also recorded for that period was an amortization of debt discount of $30,000. The derivative liability balance as of December 31, 2014 and 2013 was $-0- and $-0-, respectively. The debt discount balance as of December 31, 2014 and 2013 was $-0- and $-0-, respectively. |
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Tonaquint, Inc. |
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On September 19, 2014, the Company entered into an agreement with an another unrelated party in order to obtain short term cash flow in the form of a $59,000, ten (10) percent convertible Note Payable. Interest accrues at zero (0) percent for the first three months and if the borrower does not repay a payment of consideration on or before 90 days from its Effective Date, a one time interest charge of 12% shall be applied to the principal sum. The maturity date is one year from the effective date of the Note Payable. The lender has the right to convert at 60% of the lowest closing bid price of the Company’s common stock during the twenty-five day period prior to the conversion date or $0.002, whichever is less. In such case, the lender shall have the right to convert at 55% of the lowest closing bid price of the Company’s common stock applicable to all future conversions. As a result of the convertible note payable, the Company realized the derivative nature of those instruments. Accordingly, the Company recognized following charge to operations: derivative expense of $81,713. Furthermore, the Company recognized derivative liabilities in the amount of $131,713 and debt discounts in the amount of $50,000 which is amortized throughout the term of the note. |
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On September 30, 2014, the Company revalued the derivative value of the $59,000 10% Note using the weighted-average Black-Scholes option pricing model with the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 350.09%; (iii) risk free rate of 0.13%, (iv) expected term of 1 year, (v) market value share price of $0.007, and (vi) per share conversion price of $0.00162. The Company determined the derivative value to be $245,715 as of September 30, 2014, which represents a change in the fair value of the derivative in the amount of $114,002 as compared to the derivative value on September 19, 2014. Accordingly, the Company recorded a non-cash change in fair value of the derivative liability of $114,002 while also increasing the derivative liability from $131,713 to $245,715 as of September 30, 2014.In addition, the Company recorded an amortization of debt discount of $5,616 and a reduction of debt discounts of the same amount. |
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On December 31, 2014, the Company revalued the derivative value of the $59,000 10% Note using the weighted-average Black-Scholes option pricing model with the following assumptions; (i) dividend yield of 0%; (ii) expected volatility of 347.59%; (iii) risk free rate of 0.25%, (iv) expected term of 1 year, (v) market value share price of $0.0012, and (vi) per share conversion price of $0.00042. The Company determined the derivative value to be $155,103 as of December 31, 2014, which represents a change in the fair value of the derivative in the amount of $90,612 as compared to the derivative value on September 30, 2014. Accordingly, the Company recorded a non-cash decrease in fair value of the derivative liability of $90,612 while also decreasing the derivative liability by the same amount. In addition, the Company recorded an amortization of debt discount of $12,603 and a reduction of debt discounts of the same amount. Accrued interest at December 31, 2014 and December 31, 2013 was $7,352 and $0, respectively. Accordingly, the Company recorded a non-cash decrease in fair value of the derivative liability of $90,612 while also increasing the derivative liability from $245,715 to $155,103 as of December 31, 2014. Also recorded for that period was an amortization of debt discount of $12,603. The derivative liability balance as of December 31, 2014 and 2013 was $155,103 and $-0-, respectively. The debt discount balance as of December 31, 2014 and 2013 was $31,781 and $-0-, respectively. |
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The total derivative liability balance at December 31, 2014 and 2013 was $407,735 and $94,876, respectively. The total note payable balance at December 31, 2014 and 2013 was $151,500 and $117,500, respectively and the unamortized debt discounts balance at December 31, 2014 and 2013 was $85,260 and $49,031, respectively. During the year ended December 31, 2014 the total amount of proceeds from notes payable was $185,500 and the total amount of notes payable converted to common stock in exchange for settlement of debt was $155,942, and also $5,806 of accrued interest was converted to common stock in exchange for settlement of debt. In addition, the derivative expense at December 31, 2014 and 2013 was $668,584 and $33,833, respectively, and the change in fair value of derivatives at December 31, 2014 and 2013 was income of $159,406 and expense of $18,296, respectively. The total amortization of the debt discount at December 31, 2014 and 2013 was $183,759 and $18,469, respectively. |