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Convertible Notes Payable
9 Months Ended
Sep. 30, 2016
Notes Payable [Abstract]  
Convertible Notes Payable

Note 7 – Convertible Notes Payable

 

As of September 30, 2016, the Company has one convertible note outstanding with a third party (“Note I”). The current note balance at September 30, 2016 is $46,344, which includes $9,660 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 the original holder of Note I pursuant to which Note I exchanged $75,273 in debt into a 10% Convertible Debenture in the principal amount of $75,273 (the “Note”). The Note I Note matures January 21, 2017 (the “Maturity Date”) and interest associated with the Note I Note is 10% per annum, which is payable on the Maturity Date. The Note I Note is convertible into shares of common stock of the Company, at the option of Note I, at a fixed conversion price of $0.00752734.

 

Note I has agreed to restrict its ability to convert the Note I 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 Note I Note was issued to Note I in reliance upon exemptions from registration pursuant to Section 3(a)(9) under the Securities Act of 1933. Note I 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 Note I amended that certain 10% Convertible Debenture (the “Note I Debenture”) which debt underlying the Note I Debenture was initially incurred on October 6, 2009 and exchanged for the Note I Debenture on January 19, 2014. The parties agreed that the conversion price in the Note I 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 September 30, 2016, $8,698 remains to be amortized.