Quarterly report pursuant to Section 13 or 15(d)

SUBSEQUENT EVENTS

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SUBSEQUENT EVENTS
6 Months Ended
Jun. 30, 2016
SUBSEQUENT EVENTS  
SUBSEQUENT EVENTS

NOTE 9 - SUBSEQUENT EVENTS

 

11% Convertible Debt - HEP Investments, LLC

 

During the period from July 1, 2016 to August 12, 2016, HEP Investments LLC funded an additional loan of $230,000.  Due to this additional funding, the Company issued to the Lender for aggregate consideration of $250,000, an 11% convertible note, and warrants to purchase 250,000 shares of common stock, at an exercise price of $.10 for a term of five years.  The Company also issued 90,000 shares of common stock as financing cost related to the issuance of the 11% convertible debt.  The Convertible Notes accrue interest at the rate of 11% per annum, are non-amortizing, have a term of two years, subject to the Lender’s right to extend the term as noted in Note 5 – Convertible Debt, and are convertible, at any time prior to the maturity date into shares of common stock, at a rate equal to $.10 per share.  The Company recorded a deferred debt discount, related to the $250,000 Note, in the amount of $113,046, to reflect the beneficial conversion feature of the convertible debt and fair value of the warrants pursuant to Emerging Issues Task Force (“EITF”) 00-27: Application of EITF 98-5, “Accounting for Convertible Securities with Beneficial Conversion Features on Contingently Adjustable Conversion Rates,” to certain convertible instruments. In accordance with EITF 00-27, the Company valued the beneficial conversion feature and recorded the amount of $108,065 as a reduction to the carrying amount of the convertible debt and as an addition to paid-in capital. Additionally, the relative fair value of the warrants was calculated and recorded at $4,981 as a further reduction to the carrying amount of the convertible debt and an addition to additional paid-in capital. The Company is amortizing the debt discount over the term of the debt.

 

Loan Payable, Related Parties   

 

During the period from July 1, 2016 to August 12, 2016, Mr. Maggiore advance the Company an additional $10,000, for a total advanced of $166,405.