Convertible Notes Payable | 12 Months Ended |
Dec. 31, 2014 |
Notes to Financial Statements | |
Note 7. CONVERTIBLE NOTES PAYABLE | Effective with the Share Exchange at October 1, 2013, the outstanding convertible debt of GRAS was assumed by Carmela’s, the accounting acquirer, incorporating the following notes and transactions: |
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On June 15, 2012 the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $83,500 with an interest rate of 8% per annum that is due on March 9, 2013. The note was convertible by the holder after 180 days at 35% of the lowest trading price in the sixty trading days before the conversion. During the quarter ended December 31, 2013 Asher Enterprises issued notices of conversion to convert $20,600 on the June 2012 note for 132,010 shares at a price of $0.15 per share. The remaining balance of the note at December 31, 2013 was $6,350. An $87,148 loss on the conversion of the shares was recorded in 2013 as the note was in default and a derivative liability was no longer recorded at the time of conversions. During the three month period ended March 31, 2014 Asher Enterprises issued notices of conversion to convert the $6,350 remaining balance along with $3,340 in accrued interest on the this note to 92,286 shares at a price of $0.11 per share. The remaining balance of the note after the conversions was $-0-. An $84,610 loss on the conversion of the shares was recorded as the note was in default and a derivative liability was no longer recorded at the time of conversions. |
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On August 12, 2012 the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $20,000 with an interest rate of 8% per annum due on August 3, 2013. The note was convertible by the holder after 180 days at 35% of the lowest trading price in the thirty trading days before the conversion. During the three month period ended March 31, 2014 Asher Enterprises issued notices of conversion to convert the entire $20,000 balance along with $1,600 in accrued interest on this note to 188,714 shares at a price of $0.10 per share. The remaining balance of the note after the conversions was $-0-. A $123,850 loss on the conversion of the shares was recorded as the note was in default and a derivative liability was no longer recorded at the time of conversions. |
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On April 15, 2013 the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $53,000 with an interest rate of 8% per annum due on October 30, 2013. The note is convertible by the holder after 180 days at 40% of the lowest trading price in the thirty trading days before the conversion. During the three month period ended March 31, 2014 Asher Enterprises issued notices of conversion to convert the entire $53,000 balance along with $2,120 in accrued interest on this note to 459,333 shares at a price of $0.12 per share. The remaining balance of the note after the conversions was $-0-. A $259,903 loss on the conversion of the shares was recorded as the note was in default and a derivative liability was no longer recorded at the time of conversions. |
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On April 15, 2013 the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $15,500 with an interest rate of 8% per annum due on November 15, 2013. The note is convertible by the holder after 180 days at 40% of the lowest trading price in the thirty trading days before the conversion. During the three month period ended March 31, 2014 Asher Enterprises issued notices of conversion to convert the entire $15,500 balance along with $620 in accrued interest on this note to 134,333 shares at a price of $0.12 per share. The remaining balance of the note after the conversions was $-0-. A $51,905 loss on the conversion of the shares was recorded as the note was in default and a derivative liability was no longer recorded at the time of conversions. |
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On May 14, 2013 the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $32,500 with an interest rate of 8% per annum due on February 13, 2014. The note is convertible by the holder after 180 days at 45% of the lowest trading price in the thirty trading days before the conversion. During the three month period ended March 31, 2014 Asher Enterprises issued notices of conversion to convert the entire $32,500 balance along with $1,300 in accrued interest on this note to 250,370 shares at a price of $0.14 per share. The remaining balance of the note after the conversions was $-0-. A $111,209 decrease in derivative liability was recorded as a result of these conversions. |
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On June 24, 2013 the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $7,500 with an interest rate of 8% per annum due on March 19, 2014. The note is convertible by the holder after 180 days at 45% of the lowest trading price in the thirty trading days before the conversion. During the three month period ended March 31, 2014 Asher Enterprises issued a notice of conversion to convert the entire $7,500 balance along with $300 in accrued interest on this note to 57,778 shares at a price of $0.14 per share. The remaining balance of the note after the conversions was $-0-. A $27,314 decrease in derivative liability was recorded as a result of these conversions. |
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On September 19, 2013 the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $32,500 with an interest rate of 8% per annum due on June 12, 2014. The note is convertible by the holder after 180 days at 45% of the lowest trading price in the thirty trading days before the conversion. This note was not yet convertible as of December 31, 2013. During the three month period ended March 31, 2014 Asher Enterprises issued a notice of conversion to convert $16,600 in principal on this note to 122,963 shares at a price of $0.14 per share. The remaining balance of the note after those conversions was $15,900. In April 2014, the remaining balance of this note was acquired by CareBourn Capital, which converted the entire remaining balance of $15,900 plus $1,378 in interest into 127,984 shares at a price of $0.14 per share. The remaining balance of this note after these conversions was $-0-. A $52,025 decrease in derivative liability was recorded as a result of these conversions. |
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On August 21, 2012, the Company issued a convertible promissory note in the amount of $1,500 to the Gulfstream 1998 Irrevocable Trust. The note was unsecured, due on demand and carried interest at 8% per annum. The note was convertible into shares of common stock at the market price. During the year ended December 31, 2013 an additional $25,900 was loaned and $5,664 was repaid on these notes. In addition, $4,000 of these notes were converted to 4,000 shares of our Series B preferred stock At October 1, 2013 the remaining notes with a balance of $12,736 that was convertible at market price were amended making them convertible at 45% of the lowest trading price in the thirty trading days before the conversion creating a derivative liability. During that same period, 6,604 in principal on these notes were converted to 44,470 shares of common stock at a price of $0.15. A $14,013 decrease in the derivative liability on these notes was recorded for the converted shares. The remaining balance of the notes after the conversions was $11,133 at December 31, 2013. During the year ended December 31, 2014 an additional $18,100 was loaned under the same conversion terms but are not convertible until six months following their issuance date. Also during that period a total of $9,166 was repaid on these notes. During the three month period ended March 31, 2014 the Trust issued a notice of conversion to convert $2,700 in principal on these notes to 20,000 shares at a price of $0.14 per share. A $14,013 decrease in derivative liability was recorded as a result of the conversion. The remaining balance of these notes was $17,367 at December 31, 2014 following these transactions. |
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At October 1, 2013, an $18,000 unsecured demand promissory note with an interest rate of 8% convertible to common stock at market was outstanding. In October 2013, the conversion terms of this note was changed making it convertible at 45% of the lowest trading price in the thirty trading days before the conversion, creating a derivative liability. The entire principal balance of this note was outstanding at December 31, 2013. During the three month period ended March 31, 2014 the holder of this note issued notices of conversion to convert the entire $18,000 balance on this note plus $138 in accrued interest to 122,144 shares at a price of $0.14 per share. The remaining balance of the note after the conversions was $-0-. A $61,473 decrease in derivative liability was recorded as a result of these conversions. |
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At October 1, 2013, the Company had an outstanding convertible promissory note to CareBourn Capital in the principal amount of $6,000 with an interest rate of 8% per annum due on December 19, 2013. The note is convertible by the holder at any time at 35% of the average of the three lowest trading prices in the ten trading days before the conversion. During the quarter ended December 31, 2013, CareBourn Capital converted $3,990 on this note for 26,590 shares at a price of $0.15 per share. A $45,495 loss on the conversion of the shares was recorded as the note was in default and a derivative liability was no longer recorded at the time of conversions. The remaining balance of the note after the conversions was $2,010 at December 31, 2013. During the quarter ended March 31, 2014, CareBourn Capital converted the $2,010 balance on this note plus $416 in accrued interest to 26,172 shares at a price of $0.15 per share. The remaining balance of the note after the conversions was $-0-. A $22,915 loss on the conversion of the shares was recorded as the note was in default and a derivative liability was no longer recorded at the time of conversions. |
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At October 1, 2013, the Company had an outstanding a convertible promissory note to CareBourn Capital in the principal amount of $15,000 with an interest rate of 8% per annum due on November 3, 2013. This note is convertible by the holder at any time at 50% of the average of the three lowest trading prices in the ten trading days before the conversion. During the quarter ended December 31, 2013, CareBourn Capital converted the $15,000 balance on this note along with $777 in accrued interest for 69,492 shares at a price of $0.24 per share. A $16,500 decrease in the derivative liability on these notes was recorded upon the conversion of shares. |
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On October 1, 2013, the Company issued a convertible promissory note to Cresthill Associates in the principal amount of $9,300 with an interest rate of 8% per annum due on June 1, 2014 upon the conversion of $9,300 in accounts payable to Cresthill. This note is convertible by the holder at any time at 45% of the lowest trading price in the ninety trading days before the conversion beginning six months from the issuance date. During the quarter ended March 31, 2014 this note was assigned to CareBourn Capital, which converted the entire note balance of $9,300 along with $145 in accrued interest into 89,949 shares of common stock at $0.15 per share. The remaining balance of this note was $-0- after this conversion and a loss on the conversion of $39,683 was recorded for the difference in the market value and the conversion price on the date of conversion. |
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On October 29, 2013, the Company issued a convertible promissory note to Cresthill Associates in the principal amount of $25,000 with an interest rate of 8% per annum due on October 29, 2014 in payment of a $25,000 fee for work performed to complete the acquisition of the assets of Carmela’s Pizzeria. This note is convertible by the holder at any time at 45% of the lowest trading price in the ninety trading days before the conversion beginning six months from the issue date. In the quarter ended December 31, 2014, $12,500 of this note was sold to Beaufort Capital leaving a remaining balance of $12,500 as of that date payable to Cresthill Associates. |
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In November 2013, the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $22,500 with an interest rate of 8% per annum due on August 27, 2014. The note is convertible by the holder after 180 days at 45% of the lowest trading price in the thirty trading days before the conversion. In April 2014, this note was sold and assigned to two entities unaffiliated with Asher or the Company including $9,000 sold to CareBourn Capital and $13,500 sold to Incipix Partners. During the three month period ended September, 2014 Incipix Partners issued a notice of conversion to convert $13,500 in principal and $657 in interest on this note to 209,732 shares at a price of $0.07 per share. A $20,251 decrease in derivative liability was recorded as a result of this conversion. The remaining balance of the note after those conversions was $9,000 payable to CareBourn Capital. |
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On December 9, 2013, the Company issued a convertible promissory note to CareBourn Capital in the principal amount of $5,000 with an interest rate of 8% per annum due on June 9, 2014. This note is convertible by the holder at any time at 50% of the average of the three lowest trading prices in the ten trading days before the conversion. During the quarter ended December 31, 2014, CareBourn sold this note to Booski Consulting, an unaffiliated third party, which converted $2,600 in principal on the note to 173,333 shares of common stock at $0.015 per share. A $5,013 decrease in derivative liability was recorded as a result of this conversion. The remaining balance of the note after those conversions was $2,400. |
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In December 2013, the Company issued two convertible promissory notes to Gulfstream 1998 Trust in the aggregate principal amount of $5,000 with an interest rate of 8% per annum due on demand. These notes were convertible by the holder at any time at 45% of the lowest trading price in the ninety trading days before the conversion. At December 31, 2013, these notes were fully outstanding. During the year ended December 31, 2014 these note were repaid leaving no balance due at December 31, 2014. |
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In January 2014, the Company issued a total of $10,000 in convertible promissory notes to CareBourn Capital with an interest rate of 8% per annum due in July 2014. These notes are convertible by the holder at any time at 45% of the average of the three lowest trading prices in the ten trading days before the conversion. During the year ended December 31, 2014 the holder converted $5,000 in principal and $237 in interest on these notes to 158,768 shares at a price of $0.03 per share. An $11,072 decrease in derivative liability was recorded as a result of these conversions. The remaining balance of the note after conversions was $5,000 at December 31, 2014. |
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On February 18, 2014, the Company issued $62,500 in a convertible promissory note to CareBourn Capital with an interest rate of 8% per annum due in August 2014. This note is convertible by the holder at any time at 50% of the average of the three lowest trading prices in the ten trading days before the conversion. During the year ended December 31, 2014 the holder converted $4,590 in principal on these notes to 364,232 shares at a price of $0.012 per share. An $8,900 decrease in derivative liability was recorded as a result of these conversions. The remaining balance of the note after conversions was $57,910 at December 31, 2014. |
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On March 3, 2014, the Company issued a convertible promissory note to LG Funding in the principal amount of $35,000 with an interest rate of 8% per annum due on February 25, 2015. The note is convertible by the holder after 180 days at 50% of the lowest closing bid price in the ten trading days before the conversion. During the year ended December 31, 2014 the holder converted $16,200 in principal and $1001 in interest on these notes to 812,479 shares at a price of $0.02 per share. A $32,988 decrease in derivative liability was recorded as a result of these conversions. The remaining balance of the note after conversions was $18,800 at December 31, 2014. |
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On April 7, 2014, the Company issued a convertible promissory note to Adar Bays in the principal amount of $37,000 with an interest rate of 8% per annum due on April 1, 2015. The note is convertible by the holder after 180 days at 50% of the lowest closing bid price in the ten trading days before the conversion. During the year ended December 31, 2014 the holder converted $12,004 in principal on these notes to 671,333 shares at a price of $0.02 per share. A $19,210 decrease in derivative liability was recorded as a result of these conversions. The remaining balance of the note after conversions was $24,996 at December 31, 2014. |
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On April 17, 2014, the Company issued a convertible promissory note to Beaufort Capital in the principal amount of $25,000 with an interest rate of 10% per annum due on October 17, 2014. The note is convertible by the holder after 180 days at 60% of the lowest closing bid price in the twenty trading days before the conversion. During the year ended December 31, 2014, $10,345 of these notes were converted to 108,916,667 shares of common stock at a price of $0.0009 per share. |
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On July 15, 2014, the Company issued a convertible promissory note to Gregory Galanis in the principal amount of $13,500 with an interest rate of 8% per annum due on April 15, 2015, in exchange for $13,500 in debt owed Mr. Galanis for services rendered to the Company. The note is convertible by the holder after 180 days at 45% of the lowest closing bid price in the ninety trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2014. |
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On September 1, 2014, the Company issued a convertible promissory note to Cresthill Associates in the principal amount of $12,500 with an interest rate of 8% per annum due on July 1, 2015, in exchange for $12,500 in debt owed Cresthill for services rendered to the Company. The note is convertible by the holder after 180 days at 45% of the lowest closing bid price in the thirty trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2014. |
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On October 9, 2014, the Company issued a convertible promissory note to LG Funding in the principal amount of $26,500 with an interest rate of 8% per annum due on October 9, 2015. The note is convertible by the holder after 180 days at 50% of the lowest closing bid price in the ten trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2014. |
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On November 3, 2014, the Company issued a convertible promissory note to Beaufort Capital in the principal amount of $12,500 due on May 3, 2015 with an interest rate of 5% per annum, which accrues only in the event of a default and only from such default date until the note is paid in full. The note is convertible by the holder after 180 days at 50% of the lowest closing bid price in the ten trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2014. |
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On December 1, 2014, the Company issued a convertible promissory note to Gulfstream 1998 Irrevocable Trust in the principal amount of $3,000 due on December 1, 2015 with an interest rate of 8% per annum. The note is convertible by the holder after 180 days at 45% of the lowest trading price in the thirty trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2014. |
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Total interest expense on these notes was $16,002 and $11,587 for the years ended December 31, 2014 and 2013, respectively. |
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A summary of debentures payable as of December 31, 2014 and 2013 is as follows: |
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Face Value | | Balances 12/31/13 | | | Issuance of new convertible notes | | | Amortization of discount on convertible Notes | | | Debenture conversions & payments year ended 12/31/14 | | | Balances 12/31/14 | |
Notes outstanding at 12/31/2013 | | $ | 260,294 | | | $ | - | | | $ | - | | | $ | (224,627 | ) | | $ | 35,667 | |
2014 note issuances | | | - | | | | 252,600 | | | | - | | | | (48,139 | ) | | | 204,461 | |
Note discount | | $ | (55,423 | ) | | | (239,600 | ) | | | 276,889 | | | | - | | | | (18,134 | ) |
Total | | $ | 204,871 | | | $ | 13,000 | | | $ | 276,889 | | | $ | (272,766 | ) | | $ | 221,994 | |
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Face Value | | Balances | | | Issuance of new convertible notes | | | Amortization of discount on convertible Notes | | | Debenture conversions three months ended 12/31/13 | | | Balances 12/31/13 | |
10/1/13 |
Assumed notes | | $ | 239,687 | | | | - | | | | - | | | $ | (46,193 | ) | | $ | 193,494 | |
2013 Notes | | | - | | | | 66,800 | | | | - | | | | - | | | | 66,800 | |
Note discount | | $ | (4,000 | ) | | | (80,737 | ) | | $ | 29,314 | | | | - | | | | (55,423 | ) |
Total | | $ | 235,687 | | | $ | (13,937 | ) | | $ | 29,314 | | | $ | (46,193 | ) | | $ | 204,871 | |