Convertible Promissory Notes | 3 Months Ended |
Mar. 31, 2015 |
Debt Disclosure [Abstract] | |
Convertible Promissory Notes | NOTE 3 – Convertible Promissory Notes |
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Convertible notes payable are comprised of the following: |
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| | March 31, | | December 31, |
2015 | 2014 |
Convertible promissory notes, due May 28, 2015, net of unamortized debt discount of $28,524 | | $ | — | | | $ | 24,476 | |
Convertible promissory note, due July 3, 2015, net of unamortized debt discount of $25,440 | | | — | | | | 17,560 | |
Convertible promissory note, due August 17, 2015, net of unamortized debt discount of $31,423 and $51,768, respectively | | | 33,577 | | | | 13,232 | |
Convertible promissory note, due August 19, 2015, net of unamortized debt discount of $29,052 and $47,596, respectively | | | 27,198 | | | | 8,654 | |
Convertible promissory note, due May 19, 2015, net of unamortized debt discount of $76,796 | | | — | | | | 23,204 | |
Convertible promissory note, due December 22, 2015, net of unamortized debt discount of $36,438 and $48,767, respectively | | | 13,562 | | | | 1,233 | |
Convertible promissory note, due December 22, 2015, net of unamortized debt discount of $72,877 and $97,534, respectively | | | 27,123 | | | | 2,466 | |
Convertible promissory note, due November 14, 2015, net of unamortized debt discount of $23,086 and $31,457, respectively | | | 10,414 | | | | 2,043 | |
Convertible promissory note, due December 1, 2015, net of unamortized debt discount of $32,493 and $44,430, respectively | | | 17,507 | | | | 5,570 | |
Convertible promissory note, due November 13, 2015, net of unamortized debt discount of $34,206 and $47,767, respectively | | | 20,794 | | | | 7,233 | |
Convertible promissory note, due December 22, 2015, net of unamortized debt discount of $20,406 and $27,310, respectively | | | 7,594 | | | | 690 | |
Convertible promissory note, due July 27, 2015, net of unamortized debt discount of $65,193 | | | 34,807 | | | | — | |
Convertible promissory note, due January 26, 2016, net of unamortized debt discount of $41,233 | | | 8,767 | | | | — | |
Convertible promissory note, due November 17, 2016, net of unamortized debt discount of 66,846 | | | 12,154 | | | | — | |
Convertible promissory note, due February 20, 2016, net of unamortized debt discount of $103,605 | | | 12,395 | | | | — | |
Convertible promissory note, due February 9, 2016, net of unamortized debt discount of $93,205 | | | 14,795 | | | | | |
Total | | | 240,687 | | | | 106,361 | |
Less current portion | | | (240,687 | ) | | | (106,361 | ) |
Long term portion | | $ | — | | | $ | — | |
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2015 Notes: |
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JSJ Investments, Inc. Note |
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On January 27, 2015, the Company entered into an agreement for the sale of a Convertible Promissory Note (“JSJ Note”) in the principal amount $100,000, net proceeds of $95,000 after taking into consideration an Original Issue Discount (“OID”) of $5,000. The JSJ Note matures on July 27, 2015. The JSJ Note is convertible at 50% of the lowest trading stock price of Blue Water’s common stock during the thirty trading day period prior to the conversion date after 180 days. In addition, the Promissory Note provides for changes in conversion price should certain events occur (as defined). |
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At the inception of the JSJ Note, the Company determined the aggregate fair value of $598,055 of embedded derivatives. The fair value of the embedded derivatives was determined using the Lattice Model based on the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 223% , (3) weighted average risk-free interest rate of 0.15%, (4) expected life of 0.50 years, and (5) estimated fair value of the Company’s common stock of $0.107 per share. |
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The determined fair value of the embedded derivative of $598,055 was charged as a debt discount up to the net proceeds of the note with the remainder, $505,055, charged to current period operations as non-cash loss on change in derivative liability. |
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At March 31, 2015, the Company marked to market the fair value of the derivatives of the JSJ Note discussed above and determined a fair value of $684,254. The fair value of the embedded derivatives was determined using Lattice Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 223% to 235%, (3) weighted average risk-free interest rate of 0.25%, (4) expected life of 0.32 years, and (5) estimated fair value of the Company’s common stock of $0.082 per share. |
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The Company recorded a loss on change in derivative liability of $86,199 for the three months ended March 31, 2015. |
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As of March 31, 2015, the outstanding balance due on the JSJ Note was $100,000. During the three months ended March 31, 2015, this note incurred $34,807 in amortization expenses that was recorded in the financial statements as interest expense. Further, as of March 31, 2015, the remaining unamortized debt discount was $65,193. |
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Union Capital, LLC note |
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On January 26, 2015, the Company entered into an agreement for the sale of a Convertible Promissory Note (“Union”) in the principal amount $50,000 with an interest rate of 8% per annum pursuant to the terms of a Securities Purchase Agreement between Union Capital LLC. (“Union”) and Blue Water. The Union note closed on January 26, 2015 and matures on January 26, 2015 and is convertible at 55% of the average of the lowest closing bid price of Blue Water’s common stock during the twenty trading day period prior to the conversion date after 180 days. |
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At the inception of the Union note, the Company determined the aggregate fair value of $389,282 of embedded derivatives. The fair value of the embedded derivatives was determined using the Black Scholes Model based on the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 277% , (3) weighted average risk-free interest rate of 0.18%, (4) expected life of 1.00 years, and (5) estimated fair value of the Company’s common stock of $0.09 per share. |
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The determined fair value of the embedded derivative of $389,282 was charged as a debt discount up to the net proceeds of the note with the remainder, $339,282, charged to current period operations as non-cash loss on change in derivative liability. |
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At March 31, 2015, the Company marked to market the fair value of the derivatives of the Union note discussed above and determined a fair value of $98,598. The fair value of the embedded derivatives was determined using Black Scholes model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 270.11%, (3) weighted average risk-free interest rate of 0.26%, (4) expected life of 0.82 years, and (5) estimated fair value of the Company’s common stock of $0.082 per share. |
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The Company recorded a gain on change in derivative liability of $290,684 for the three months ended March 31, 2015. |
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As of March 31, 2015, the outstanding balance due on the Union note was $50,000. During the three months ended March 31, 2015, this note incurred $8,767 in amortization expenses that was recorded in the financial statements as interest expense. Further, as of March 31, 2015, the remaining unamortized debt discount was $41,233. |
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KBM Worldwide Note |
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On February 17, 2015, the Company entered into an agreement for the sale of a Convertible Promissory Note (“KBM”) in the principal amount $79,000 with an interest rate of 8% per annum pursuant to the terms of a Securities Purchase Agreement between KBM Worldwide, Inc. (“KBM”), a New York corporation, and Blue Water. The KBM Note 1 matures on November 17, 2015. The KBM Note is convertible at 58% of the average of the lowest three trading prices of Blue Water’s common stock during the ten trading day period prior to the conversion date after 180 days. In addition, the Promissory Note provides for changes in conversion price should certain events occur (as defined). |
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At the inception of the KBM Note, the Company determined the aggregate fair value of $110,668 of embedded derivatives. The fair value of the embedded derivatives was determined using the Bionomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 223%, (3) weighted average risk-free interest rate of 0.25%, (4) expected life of 0.75 years, and (5) estimated fair value of the Company’s common stock of $0.129 per share. |
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The determined fair value of the embedded derivative of $110,668 was charged as a debt discount up to the net proceeds of the note with the remainder, $31,668, charged to current period operations as non-cash loss on change in derivative liability. |
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At March 31, 2015, the Company marked to market the fair value of the derivatives of the KBM Note discussed above and determined a fair value of $137,009. The fair value of the embedded derivatives was determined using Binomial Option Pricing model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 223%, (3) weighted average risk-free interest rate of 0.25%, (4) expected life of 0.75 years, and (5) estimated fair value of the Company’s common stock of $0.1085 per share. |
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The Company recorded a gain on change in derivative liability of $211 for the three months ended March 31, 2015. |
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As of March 31, 2015, the outstanding balance due on the KBM note was $79,000. During the three months ended March 31, 2015, this note incurred $12,154 in amortization expenses that was recorded in the financial statements as interest expense. Further, as of March 31, 2015, the remaining unamortized debt discount was $66,846. |
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JDF Capital, Inc. Note |
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On February 20, 2015, the Company entered into an agreement for the sale of a Convertible Promissory Note (“JDF Note”) in the principal amount $116,000, net proceeds of $106,000 after taking into consideration an Original Issue Discount (“OID”) of $10,000. The JDF Note matures on February 20, 2016. The JDF Note is convertible at 40% of the lowest trading stock price of Blue Water’s common stock during the twenty five trading day period prior to the conversion date 180 days. In addition, the Promissory Note provides for changes in conversion price should certain events occur (as defined). |
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At the inception of the JDF Note, the Company determined the aggregate fair value of $353,080 of embedded derivatives. The fair value of the embedded derivatives was determined using the Lattice Model based on the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 223% , (3) weighted average risk-free interest rate of 0.15%, (4) expected life of 1.00 years, and (5) estimated fair value of the Company’s common stock of $0.11 per share. |
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The determined fair value of the embedded derivative of $353,080 was charged as a debt discount up to the net proceeds of the note with the remainder, $30,412, charged to current period operations as non-cash loss on change in derivative liability. |
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At March 31, 2015, the Company marked to market the fair value of the derivatives of the JDF Note discussed above and determined a fair value of $249,787. The fair value of the embedded derivatives was determined using Lattice Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 223% to 235%, (3) weighted average risk-free interest rate of 0.25%, (4) expected life of 0.89 years, and (5) estimated fair value of the Company’s common stock of $0.082 per share. |
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The Company recorded a loss on change in derivative liability of $7,375 for the three months ended March 31, 2015. |
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As of March 31, 2015, the outstanding balance due on the JDF Note was $116,000. During the three months ended March 31, 2015, this note incurred $12,395 in amortization expenses that was recorded in the financial statements as interest expense. Further, as of March 31, 2015, the remaining unamortized debt discount was $103,605. |
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Blue Citi, LLC. Note |
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On February 9, 2015, the Company entered into an agreement for the sale of a Convertible Promissory Note (“Blue Note”) in the principal amount $108,000, net proceeds of $106,000 after taking into consideration an Original Issue Discount (“OID”) of $6,000. The JDF Note matures on February 9, 2016. The Blue Note is convertible at 60% of the lowest daily closing bid price of Blue Water’s common stock during the twenty trading day period prior to the conversion date 180 days. In addition, the Promissory Note provides for changes in conversion price should certain events occur (as defined). |
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At the inception of the Blue Note, the Company determined the aggregate fair value of 289,664 of embedded derivatives. The fair value of the embedded derivatives was determined using the Lattice Model based on the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 223% , (3) weighted average risk-free interest rate of 0.15%, (4) expected life of 1.00 years, and (5) estimated fair value of the Company’s common stock of $0.096 per share. |
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The determined fair value of the embedded derivative of $289,664 was charged as a debt discount up to the net proceeds of the note with the remainder, $189,664, charged to current period operations as non-cash loss on change in derivative liability. |
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At March 31, 2015, the Company marked to market the fair value of the derivatives of the Blue note discussed above and determined a fair value of $268,870. The fair value of the embedded derivatives was determined using Lattice Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 223% to 235%, (3) weighted average risk-free interest rate of 0.25%, (4) expected life of 0.87 years, and (5) estimated fair value of the Company’s common stock of $0.082 per share. |
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The Company recorded a gain on change in derivative liability of $20,794 for the three months ended March 31, 2015. |
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As of March 31, 2015, the outstanding balance due on the JDF Note was $106,000. During the three months ended March 31, 2015, this note incurred $14,795 in amortization expenses that was recorded in the financial statements as interest expense. Further, as of March 31, 2015, the remaining unamortized debt discount was $93,205. |