Quarterly report pursuant to Section 13 or 15(d)

SUBSEQUENT EVENTS

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SUBSEQUENT EVENTS
9 Months Ended
Sep. 30, 2016
SUBSEQUENT EVENTS  
SUBSEQUENT EVENTS

NOTE 10 - SUBSEQUENT EVENTS

 

11% Convertible Debt - HEP Investments, LLC

 

During the period from October 1, 2016 to November 14, 2016, HEP Investments LLC (“Lender”) funded an additional loan of $150,000.  Due to this additional funding, the Company issued to 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 128,571 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 Lender’s right to extend the term as noted in Note 6 – 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 $15,407, to reflect the relative fair value of the warrants as a 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.

 

11% Convertible Debt - Paulson Investment Company, LLC Related Debt

 

During the period from October 1, 2016 to November 14, 2016, Paulson placed investments with three investors (the “New Lender”) who provided funding of $650,000 through three individual loans.  Due to this additional funding, the Company issued to the New Lenders for aggregate consideration of $650,000, an 11% convertible note, convertible into the Company’s restricted common stock at $.10 per share.  The Convertible Notes accrue interest at the rate of 11% per annum, are non-amortizing, have a term of two years, subject to the New Lender’s right to extend the term as noted in Note 6 – 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.  

 

Increase in Authorized Shares

 

On November 9, 2016, the shareholders of the Company voted for Approval and adoption of an amendment to the Articles of Incorporation, as amended, to increase the number of authorized shares of common stock from 300,000,000 shares to 450,000,000 shares.  The Certificate of Amendment to the Articles of Incorporation is in the process of being filed with the Secretary of State of Nevada.