Notes Payable | 9 Months Ended |
Apr. 30, 2014 |
Debt Disclosure [Abstract] | ' |
Notes Payable | ' |
NOTE 3 – NOTES PAYABLE |
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As of April 30, 2014, the Company had the following loans payable outstanding: |
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Convertible notes: |
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On October 10, 2013, the Company entered into a convertible promissory note with a third party for $37,500, with an initial discount of $2,500. The note bears interest at 8% and a maturity date of July 12, 2014. In the event that the note remains unpaid at that date, the Company will pay default interest at 22%. The lender has the right after a period of 180 days to convert the balance outstanding into the Company's common stock at a rate equal to 51% of the average of the three trading prices during the 10 trading days prior to the conversion date. |
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On March 17, 2014, the Company entered into a convertible promissory note with a third party for $53,500. The note bears interest at 8% and a maturity date of December 19, 2014. The lender has the right after a period of 270 days to convert the balance outstanding into the Company's common stock at a rate equal to 45% of the lowest trading prices during the 30 trading days prior to the conversion date. |
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On October 21, 2013, the Company entered into a convertible note with a third party for $25,000. This note bears an interest rate of 12% per annum and is due April 21, 2014. The lender has the right at any time prior to the maturity date to convert the principal and interest outstanding into the Company's common stock at a rate equal to 50% of the average of three lowest closing prices during the ten trading days prior to the conversion date. |
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On March 24, 2014, the Company entered into a convertible promissory note with a third party for $100,000. The note bears interest at 12% and a maturity date of September 24, 2014. The lender has the right after a period of 180 days to convert the balance outstanding into the Company's common stock at a rate equal to 50% of the average of the three trading prices during the 20 trading days prior to the conversion date |
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On October 23, 2013, the Company entered into a promissory note with a third party for $500,000, with an initial discount of $50,000. During the three months ended October 31, 2013, the Company received the first advance of $50,000. During the three months ended April 30, 2014 the Company received an additional $125,000. The note has a maturity date of two years from effective date of each payment and bears and interest rate of 12%. The note can be converted into the Company’s common stock at lessor of $0.03 or 60% of the lowest trade price in the 25 trading days previous to the conversion. |
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On December 23, 2013, the Company entered into a note purchase agreement with a third party to purchase a Convertible Promissory Note for $113,500, with an initial discount of $13,500. This note bears an interest rate of 8% per annum and is due December 27, 2014. The lender has the right at any time on or after 90 days from the issuance date to convert the balance outstanding into the Company's common stock at a rate equal to 55% of the lowest sale price of the common stock for the 20 trading immediately prior to the voluntary conversion date. During the quarter ended April 30, 2014, the Company issued $25,000 of common stock. Balance on this note as of April 30, 2014 $73,500. |
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On December 13, 2013, the Company entered into a convertible note with a third party for $35,000, with an initial discount of $5,000. This note bears an interest rate of 10% per annum and is due June 1, 2014. The lender has the right after a period of 180 days to convert the balance outstanding into the Company's common stock at a rate equal to 60% of the lowest closing prices during the twenty trading days prior to the conversion date. |
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On March 21, 2014, the Company entered into a convertible promissory note with a third party for $55,000, with and an initial discount of $5,000. The note bears interest at 10% and a maturity date of October 1, 2014. The lender has the right after a period of 180 days to convert the balance outstanding into the Company's common stock at a rate equal to 60% of the lowest trading prices during the 20 trading days prior to the conversion date. |
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On December 3, 2013, the Company entered into a senior convertible note with a third party for $450,000, with an initial discount of $150,000. The note has a maturity date of June 3, 2014 and bears and interest rate of 12%. The lender has the right at any time to convert the balance outstanding into the Company's common stock at a conversion price of $0.00616 (subject to adjustment). |
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On December 12, 2013, the Company entered into a convertible note with a third party for $100,000, with an initial discount of $10,000. This note bears an interest rate of 10% per annum and is due December 12, 2014. The lender has the right to convert the balance outstanding into the Company's common stock at a rate equal to 60% of the lowest trading prices during the 15 trading days prior to the holder elected conversion date. During the quarter ended April 30, 2014 the Company converted $90,000 of this note to common stock. |
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On December 12, 2013, the Company entered into a convertible promissory note with a third party for $450,000, with an initial discount of $10,000. $250,000 of the note was advanced prior to January 31, 2014. During the quarter ended April 30, 2014 the additional $200,000 was advanced. This note bears an interest rate of 10% per annum and is due December 12, 2014. The lender has the right to convert the balance outstanding into the Company's common stock at a rate equal to 60% of the lowest trading prices during the 15 trading days prior to the holder elected conversion date. During the quarter ended April 30, 2014 the Company converted $90,000 of this note to common stock. |
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On October 31, 2013, the Company entered into a convertible note with a third party for $50,000, with an initial discount of $5,500. This note bears an interest rate of 8% per annum and is due October 31, 2014. The lender has the right to convert the balance outstanding into the Company's common stock at a rate equal to 60% of the lowest closing prices during the 20 trading days prior to the conversion date. During the three months ended April 30, 2014, the Company converted $25,750 of this note to common stock, balance outstanding on this note as of April 30, 2014 was $18,750. |
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On December 27, 2013, the Company entered into a convertible note with a third party for $50,000, with an initial discount of $5,500. This note bears an interest rate of 12% per annum and is due September 30, 2014. The lender has the right to convert the balance outstanding into the Company's common stock at a rate equal to 50% of the lowest closing prices during the 20 trading days prior to the conversion date. During the quarter ended April 30, 2014, , the Company converted $25,750 of this note to common stock, balance outstanding on this note as of April 30, 2014 was $18,750. |
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On December 27, 2013, the Company also entered into a convertible note with a third party for $50,000, with an initial discount of $5,500. This note bears an interest rate of 12% per annum and is due September 30, 2014. The lender has the right to convert the balance outstanding into the Company's common stock at a rate equal to 50% of the lowest closing prices during the 20 trading days prior to the conversion date. |
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On March 20, 2014, the Company entered into a convertible promissory note with a third party for $84,000. The note bears interest at 8% and a maturity date of March 20, 2015. The lender has the right after a period of 360 days to convert the balance outstanding into the Company's common stock at a rate equal to 50% of the lowest trading prices during the 20 trading days prior to the conversion date. |
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On November 18, 2013, the Company entered into a convertible debenture with a third party for $250,000. This note bears an interest rate of 10% per annum and is due May 18, 2014. The lender has the right to convert the balance outstanding into the Company's common stock at a rate equal to 50% of the lowest closing prices during the twenty trading days prior to the conversion date. During the quarter ending April 30, 2014 the Company converted $87,500 of this note to common stock, balance on this note as of April 30, 2014 was $162,500. |
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On November 18, 2013, the Company entered into a convertible debenture with a third party for $150,000. This note bears an interest rate of 10% per annum and is due May 18, 2014. The lender has the right to convert the balance outstanding into the Company's common stock at a rate equal to 50% of the lowest closing prices during the twenty trading days prior to the conversion date. During the quarter ending January 31, 2014 the Company converted $150,000 of the note to common stock. |
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On November 18, 2013, the Company entered into a convertible debenture with a third party for $150,000. This note bears an interest rate of 10% per annum and is due May 18, 2014. The lender has the right to convert the balance outstanding into the Company's common stock at a rate equal to 50% of the lowest closing prices during the twenty trading days prior to the conversion date. During the quarter ending January 31, 2014, the Company converted $150,000 of the note to common stock. |
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On November 18, 2013, the Company entered into a convertible debenture with a third party for $225,000. This note bears an interest rate of 10% per annum and is due May 18, 2014. The lender has the right to convert the balance outstanding into the Company's common stock at a rate equal to 50% of the lowest closing prices during the twenty trading days prior to the conversion date. |
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On December 27, 2013, the Company entered into a convertible note with a third party for $50,000. This note bears an interest rate of 12% per annum and is due September 30, 2014. The lender has the right to convert the balance outstanding into the Company's common stock at a rate equal to 50% of the lowest closing prices during the 20 trading days prior to the conversion date. During the quarter ended April 30, 2014, the Company converted $25,750 of the note to common stock. |
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On December 27, 2013, the Company also entered into a convertible note with a third party for $50,000. This note bears an interest rate of 12% per annum and is due September 30, 2014. The lender has the right to convert the balance outstanding into the Company's common stock at a rate equal to 50% of the lowest closing prices during the 20 trading days prior to the conversion date. |
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On April 30, 2014, the Company entered into a convertible promissory note with a third party for $37,500. The note bears interest at 8% and a maturity date of January 30, 2015. The lender has the right after a period of 360 days to convert the balance outstanding into the Company's common stock at a rate equal to 55% of the average lowest 2 day trading prices during the 15 trading days prior to the conversion date. |
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The Company evaluated the conversion features on the above convertible notes and determined that they created an embedded financial derivative due to there being no explicit limit to the number of shares to be issued upon conversion. The Company recorded the initial fair value of $1,878,951 on the financial derivatives as discount to the convertible notes. |
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For the nine months ended April 30, 2014, the Company recorded $1,095,201 interest expense under straight-line method to amortize the discounts (both original discount and derivative discount) on the convertible notes. The remaining unamortized discount as of April 30, 2014 was $1,027,522. |
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Note payable: |
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The Company has a note payable to Atoll Finance. Interest on the note is 5% per annum. During the nine months ended April 30, 2014, the Company (through its other lenders) repaid $1,204,000 and the balance was reduced from $1,712,242 to $451,009 including accrued interest. The note is unsecured and is currently past due. A lender has an option to purchase $312,242 of the remaining balance. The Company recorded $42,800 of imputed interest on the payable due to Atoll Finance for the nine months ended April 30, 2014. |