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Notes and Convertible Notes Payable
3 Months Ended
Mar. 31, 2016
Notes Payable [Abstract]  
Notes and Convertible Notes Payable

Note 6 – Notes and Convertible Notes Payable

 

As of March 31, 2016, the Company has only one convertible note outstanding with a third party (“GVG”). The current note balance at March 31, 2016 is $47,204, which includes $7,629 of accrued interest. At December 31, 2015, the Company had only this note outstanding as well. The balance at that time was $38,924, which included accrued interest of $6,851.

 

On January 22, 2015, the Company entered into an Exchange Agreement with GVG pursuant to which GVG exchanged $75,273 in debt into a 10% Convertible Debenture in the principal amount of $75,273 (the “GV Note”). The GVG Note matures January 21, 2017 (the “Maturity Date”) and interest associated with the GVG Note is 10% per annum, which is payable on the Maturity Date. The GVG Note is convertible into shares of common stock of the Company, at the option of GVG, at a fixed conversion price of $0.00752734.

 

GVG has agreed to restrict its ability to convert the GVG Note and receive shares of common stock such that the number of shares of common stock held by it in the aggregate and its affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock. The GVG Note was issued to GVG in reliance upon exemptions from registration pursuant to Section 3(a)(9) under the Securities Act of 1933. GVG is an accredited investor as defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933. In addition, on March 2, 2015, the Company and GVG amended that certain 10% Convertible Debenture (the “GV Debenture”) which debt underlying the GV Debenture was initially incurred on October 6, 2009 and exchanged for the GV Debenture on January 19, 2014. The parties agreed that the conversion price in the GV Debenture would not be impacted by the 1:1,000 stock split implemented by the Company on February 24, 2015 and will remain $0.0075273. Beneficial Conversion Feature (“BCF”) in the amount of $75,273 has not yet been fully amortized from the note balance. As of March 31, 2016, $30,522 remains to be amortized.