Commission File Number:
|
000-55137
|
SOLO INTERNATIONAL, INC.
|
|
(Name of small business issuer in its charter)
|
|
Nevada
|
68-0680819
|
(State or other jurisdiction of incorporation or organization
|
(I.R.S. Employer Identification No.)
|
871 Coronado Center Drive, Suite 200, Henderson, NV 89052
|
|
(Address of principal executive offices)(Zip Code)
|
|
(888) 612-9246
|
|
(Registrant’s telephone number)
|
Yes [X]
|
No [ ]
|
Yes [ ]
|
No [X]
|
Large accelerated filer
|
[ ]
|
Accelerated filer
|
[ ]
|
Non-accelerated filer
|
[ ]
|
Smaller reporting company
|
[X]
|
(Do not check if a smaller reporting company)
|
Yes [ ]
|
No [X]
|
|
Page
|
|
PART I. FINANCIAL INFORMATION
|
||
|
||
FINANCIAL STATEMENTS
|
3 | |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
4 | |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
7 | |
CONTROLS AND PROCEDURES
|
7 | |
|
||
PART II. OTHER INFORMATION
|
||
|
8 | |
LEGAL PROCEEDINGS
|
||
RISK FACTORS
|
8 | |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
8 | |
DEFAULTS UPON SENIOR SECURITIES
|
8 | |
MINE SAFETY DISCLOSURES
|
8 | |
OTHER INFORMATION
|
8 | |
EXHIBITS
|
9 | |
10 |
Financial Statement Index
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Page
|
|
F-1
|
||
F-2
|
||
F-3
|
||
F-4 to F-16
|
December 31, 2014
(unaudited)
|
September 30, 2014
(audited)
|
|||||||
ASSETS
|
||||||||
Current
|
||||||||
Cash
|
$
|
104
|
$
|
20
|
||||
Prepaid expense
|
813
|
882
|
||||||
Total Current Assets
|
917
|
902
|
||||||
Total Assets
|
$
|
917
|
$
|
902
|
||||
LIABILTIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)
|
||||||||
Current liabilities
|
||||||||
Accounts payable and accrued liabilities
|
$
|
186,405
|
$
|
164,763
|
||||
Accounts payable and accrued liabilities, related party
|
4,472
|
4,592
|
||||||
Advances from related parties
|
6,417
|
6,417
|
||||||
Convertible promissory notes, net (Note 5)
|
485,341
|
507,344
|
||||||
Derivate liabilities
|
289,851
|
335,918
|
||||||
Total Current Liabilities
|
972,486
|
1,019,034
|
||||||
STOCKHOLDERS’ EQUITY (DEFICIENCY)
|
||||||||
Common stock: 900,000,000 shares authorized, at $0.001 par value 547,029,250 and 497,690,625 shares issued and outstanding as at December 31, 2014 and September 30, 2014, respectively
|
547,029
|
497,691
|
||||||
Capital in excess of par value
|
(172,447
|
)
|
(117,245
|
)
|
||||
Accumulated Deficit
|
(1,346,151
|
)
|
(1,398,578
|
)
|
||||
Total Stockholders’ Equity (Deficiency)
|
(971,569
|
)
|
(1,018,132
|
)
|
||||
Total Liabilities and Stockholders’ Equity (Deficiency)
|
$
|
917
|
$
|
902
|
Three Months Ended
December 31,
|
||||||||
2014
|
2013
|
|||||||
REVENUE
|
$
|
-
|
$
|
-
|
||||
EXPENSES
|
||||||||
Professional fees
|
11,818
|
19,222
|
||||||
Management fees
|
7,500
|
11,000
|
||||||
Other general and administrative expenses
|
5,124
|
8,939
|
||||||
OPERATING LOSS
|
(24,442
|
)
|
(39,161
|
)
|
||||
OTHER INCOME (EXPENSES)
|
||||||||
Derivate income (expenses)
|
96,531
|
-
|
||||||
Interest expenses
|
(19,662
|
)
|
(30,810
|
)
|
||||
NET LOSS
|
52,427
|
(69,971
|
)
|
|||||
Basic and diluted loss per share
|
$
|
(0.00
|
)*
|
$
|
(0.00
|
)*
|
||
Weighted average number of shares outstanding, basic and diluted
|
331,134,589
|
288,000,000
|
||||||
*
|
Less than $0.01 per share
|
Three Months Ended
December 31,
|
||||||||
2014
|
2013
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$
|
52,427
|
$
|
(69,971
|
)
|
|||
Adjustment to reconcile net loss to net cash (used in) operating activities:
|
||||||||
Change in fair value of derivative liabilities
|
(96,531
|
)
|
-
|
|||||
Interest expense-Amortization of discount on convertible promissory notes
|
7,097
|
17,254
|
||||||
Changes in operating assets and liabilities:
|
||||||||
(Increase) decrease in prepaid expense
|
69
|
3
|
||||||
Increase (decrease) in accounts payable and accrued liabilities
|
21,522
|
15,800
|
||||||
Net cash provided by (used) in operating activities
|
(15,416
|
)
|
(36,914
|
)
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Net cash used in investing activities
|
-
|
-
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from convertible notes payable
|
15,500
|
37,500
|
||||||
Net cash provided by financing activities
|
15,500
|
37,500
|
||||||
Increase (decrease) in cash during the period
|
84
|
586
|
||||||
Cash, beginning of period
|
20
|
-
|
||||||
Cash, end of period
|
$
|
104
|
$
|
586
|
||||
Supplemental cash flow information:
|
||||||||
Cash paid for:
|
||||||||
Interest
|
$
|
-
|
$
|
-
|
||||
Taxes
|
$
|
-
|
$
|
-
|
||||
Non-cash transactions:
|
||||||||
Shares issued for convertible notes
|
$
|
30,000
|
$
|
-
|
Warrants
|
700,000 | |||
Convertible Notes (Note 6(i))
|
525,556,601 | |||
Convertible Notes (Note 6(ii))
|
62,715,585 | |||
Convertible Notes (Note 6 (iii))
|
45,166,667 | |||
Convertible Notes (Note 6(iv))
|
30,000,000 | |||
Total
|
664,138,852 |
· Level 1: Quoted prices in active markets for identical assets or liabilities.
|
· Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.
|
· Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
December 31,
2014
|
September 30,
2014
|
||||||||
Derivative liabilities
|
Level 3
|
$
|
300,021
|
$
|
335,918
|
(i)
|
Craigstone Ltd. (“Craigstone”)
|
(i)
|
Craigstone Ltd. (“Craigstone”) (continued)
|
December 31,
2014
|
September 30,
2014
|
Issue Date
|
||||||||||
Convertible Promissory Note – face value, due on March 31, 2015
|
$
|
100,000
|
$
|
100,000
|
$
|
100,000
|
||||||
Convertible Promissory Note – face value, due on November 4, 2014
|
115,000
|
115,000
|
115,000
|
|||||||||
Convertible Promissory Note – face value, due on March 31, 2015
|
85,000
|
85,000
|
85,000
|
|||||||||
Convertible Promissory Note – face value, due on March 31, 2015
|
35,000
|
35,000
|
35,000
|
|||||||||
Convertible Promissory Note – face value, due on May 11, 2014
|
25,000
|
25,000
|
25,000
|
|||||||||
Convertible Promissory Note – face value, due on June 19, 2014
|
25,000
|
25,000
|
25,000
|
|||||||||
Convertible Promissory Note – face value, due on March 31, 2015
|
35,000
|
35,000
|
35,000
|
|||||||||
Convertible Promissory Note – face value, due on March 31, 2015
|
15,000
|
15,000
|
15,000
|
|||||||||
Convertible Promissory Note – face value, due on March 31, 2015
|
15,000
|
15,000
|
15,000
|
|||||||||
Convertible Promissory Note – face value, due on May 30, 2014
|
15,000
|
15,000
|
15,000
|
|||||||||
Note value converted to shares
|
(46,000
|
)
|
(16,000
|
)
|
||||||||
Total convertible promissory note – face value
|
419,000
|
449,000
|
465,000
|
|||||||||
Less: beneficial conversion feature
|
-
|
-
|
(215,439
|
)
|
||||||||
Warrant discount
|
-
|
-
|
(60,439
|
)
|
||||||||
$
|
419,000
|
$
|
449,000
|
$
|
189,122
|
For the three months ended
|
|||||||||
December 31,
2014
|
December 31,
2013
|
|
|||||||
Amortization of debt discount
|
$ | - | $ | 2,335 | |||||
Interest at contractual rate
|
10,986 | 11,720 | |||||||
Totals
|
$ | 10,986 | $ | 14,055 |
(ii)
|
Adams Ale Inc.
|
December 31, 2014
|
September 30, 2014
|
Issue Date
|
||||||||||
Convertible Promissory Note – face value, due on February 15, 2014
|
$
|
50,000
|
$
|
50,000
|
$
|
50,000
|
||||||
Total convertible promissory note – face value
|
50,000
|
50,000
|
50,000
|
|||||||||
Less: beneficial conversion feature
|
-
|
-
|
(17,473
|
)
|
||||||||
Warrant discount
|
-
|
-
|
(806
|
)
|
||||||||
50,000
|
50,000
|
31,721
|
For the three months ended
|
||||||||
December 31,
2014
|
December 31,
2013
|
|||||||
Amortization of debt discount
|
$
|
-
|
$
|
4,608
|
||||
Interest at contractual rate
|
1,260
|
1,260
|
||||||
Totals
|
$
|
1,260
|
$
|
5,868
|
(iii)
|
Investor Growth LLC (“IG”)
|
For the three months ended | ||||||||
December 31,
2014
|
December 31,
2013
|
|||||||
Amortization of debt discount
|
$ | 6,461 | $ | - | ||||
Interest at contractual rate
|
302 | - | ||||||
Totals
|
$ | 6,763 | $ | - |
(iv)
|
Level Up Investments, LLC. (“LUI LLC”)
|
(iv)
|
Level Up Investments, LLC. (“LUI LLC”) (continued)
|
December 15, 2014 NOTE
|
December 29, 2014 NOTE
|
Total
|
||||||||||
Derivative liabilities, issued date
|
$
|
6,800
|
$
|
2,800
|
$
|
9,600
|
||||||
Fair value mark to market adjustment
|
200
|
-
|
200
|
|||||||||
Derivative liabilities, December 31, 2014
|
$
|
7,000
|
$
|
2,800
|
$
|
9,800
|
Commitment Date
|
Revaluation Date
|
||||||||
Expected dividends
|
0
|
0
|
|||||||
Expected volatility
|
213.28 ~ 231.52
|
%
|
231.52 %
|
||||||
Expect term
|
0.50 years
|
0.45~0.50 years
|
|||||||
Risk free interest rate
|
0.08 ~ 0.12
|
%
|
0.12
|
%
|
(iv)
|
Level Up Investments, LLC. (“LUI LLC”) (continued)
|
September 30, 2014
|
Issue Date
|
|||||||
Convertible Promissory Note – face value, due on June 15, 2015
|
$
|
7,500
|
$
|
7,500
|
||||
Convertible Promissory Note – face value, due on June 29, 2015
|
3,000
|
3,000
|
||||||
Total convertible promissory note – face value
|
10,500
|
10,500
|
||||||
Less: Debt discount
|
(8,964
|
)
|
(9,600)
|
|||||
1,536
|
900
|
Three months ended
December 31, 2014
|
||||||||
2014
|
2013
|
|||||||
Amortization of debt discount
|
$
|
636
|
$
|
-
|
||||
Interest at contractual rate
|
17
|
-
|
||||||
Totals
|
$
|
653
|
$
|
-
|
(v)
|
Derivative liabilities from exceed authorized shares of common stock
|
Balance at September 30, 2014
|
$ | 335,918 | ||
Derivative liabilities due to the tainting of convertible notes
|
40,864 | |||
(Gain) on change in fair value
|
(96,731 | ) | ||
Balance at December 31, 2014
|
$ | 280,051 |
Stock Price on Measurement Date
|
$
|
0.0068 ~ 0.135
|
|
Exercise Price of Warrants
|
$
|
0.0051 ~ 0.101
|
|
Term of Warrants (years)
|
3.00
|
||
Computed Volatility
|
125.84% ~ 147.91%
|
||
Annual Dividends
|
0.00
|
%
|
|
Discount Rate
|
0.33 ~ 0.49
|
%
|
December 31, 2014
|
September 30, 2014
|
|||||||||||||||
Warrants
|
Weighted average
exercise price
|
Warrants
|
Weighted average
exercise price
|
|||||||||||||
Outstanding at the beginning of the period
|
1,200,000
|
$
|
0.060
|
1,200,000
|
$
|
0.060
|
||||||||||
Granted
|
-
|
-
|
||||||||||||||
Exercised
|
-
|
-
|
||||||||||||||
Expired
|
(500,000
|
)
|
0.075
|
|||||||||||||
Cancelled
|
-
|
-
|
||||||||||||||
Outstanding at the end of the period
|
700,000
|
$
|
0.049
|
1,200,000
|
$
|
0.060
|
||||||||||
Vested and exercisable at the end of period
|
700,000
|
1,200,000
|
||||||||||||||
Weighted average fair value per share of warrants granted during the period
|
$
|
0.049
|
$
|
0.060
|
Warrants Outstanding
|
Warrants Exercisable
|
|||||||||||||||||||||||||
Exercise prices
|
Number
Outstanding
|
Weighted
average
remaining
contractual
life (years)
|
Weighted
average
exercise
price
|
Number
exercisable
|
Weighted
average
remaining
contractual
life (years)
|
Weighted
average
exercise
price
|
||||||||||||||||||||
$ | 0.005-0.10 | 700,000 | 0.57 | $ | 0.049 | 700,000 | 0.57 | $ | 0.049 |
Exercise Price
|
Expiry Date
|
Weighted Average Remaining Contractual Life (Years)
|
Outstanding at
September 30, 2014
|
Issued
|
Exercised
|
Expired
|
Outstanding at
December 31, 2014
|
|||||||||||||||||
$
|
0.075
|
November 4, 2014
|
0.10
|
250,000
|
-
|
-
|
250,000
|
-
|
||||||||||||||||
$
|
0.075
|
November 4, 2014
|
0.10
|
250,000
|
-
|
-
|
250,000
|
-
|
||||||||||||||||
$
|
0.101
|
February 3, 2015
|
0.09
|
177,083
|
-
|
-
|
-
|
177,083
|
||||||||||||||||
$
|
0.041
|
March 8, 2015
|
0.18
|
72,917
|
-
|
-
|
-
|
72,917
|
||||||||||||||||
$
|
0.052
|
May 11, 2015
|
0.36
|
62,500
|
-
|
-
|
-
|
62,500
|
||||||||||||||||
$
|
0.03
|
June 19, 2015
|
0.47
|
62,500
|
-
|
-
|
-
|
62,500
|
||||||||||||||||
$
|
0.03
|
September 11, 2015
|
0.70
|
87,500
|
-
|
-
|
-
|
87,500
|
||||||||||||||||
$
|
0.064
|
October 19, 2015
|
0.80
|
37,500
|
-
|
-
|
-
|
37,500
|
||||||||||||||||
$
|
0.056
|
October 26, 2015
|
0.82
|
37,500
|
-
|
-
|
-
|
37,500
|
||||||||||||||||
$
|
.008
|
February 15, 2016
|
1.13
|
125,000
|
-
|
-
|
-
|
125,000
|
||||||||||||||||
$
|
0.005
|
May 30, 2016
|
1.41
|
37,500
|
-
|
-
|
-
|
37,500
|
||||||||||||||||
0.57
|
1,200,000
|
-
|
-
|
-
|
700,000
|
December 31, 2014
|
December 31, 2013
|
|||||||
Net operating loss carry forward
|
1,346,151
|
1,030,824
|
||||||
Effective Tax Rate
|
35
|
%
|
35
|
%
|
||||
Deferred Tax Assets
|
471,100
|
360,788
|
||||||
Less: Valuation Allowance
|
(471,100
|
)
|
(360,788
|
)
|
||||
Net deferred tax asset
|
$
|
0
|
$
|
0
|
December 31, 2014
|
December 31, 2013
|
|||||||
Federal statutory tax rate
|
(35.0
|
)%
|
(35.0
|
)%
|
||||
Permanent difference and other
|
35.0
|
%
|
35.0
|
%
|
||||
Effective tax rate
|
-
|
%
|
-
|
%
|
|
December 31, 2014
$
|
September 30, 2014
$
|
||||||
Current Assets
|
917
|
902
|
||||||
Current Liabilities
|
972,486
|
1,019,034
|
||||||
Working Capital (Deficit)
|
(971,569
|
)
|
(1,018,132
|
)
|
|
December 31, 2014
$
|
December 31, 2013
$
|
||||||
Cash Flows from (used in) Operating Activities
|
(15,416
|
)
|
(36,914
|
)
|
||||
Cash Flows from (used in) Investing Activities
|
-
|
-
|
||||||
Cash Flows from (used in) Financing Activities
|
15,500
|
37,500
|
||||||
Net Increase (decrease) in Cash During Period
|
104
|
586
|
Exhibit Number
|
Description of Exhibit
|
Filing
|
3.01
|
Articles of Incorporation
|
Filed with the SEC on October 22, 2010 as part of our Registration Statement on Form S-1.
|
3.01(a)
|
Certificate of Change
|
Filed with the SEC on November 7, 2012 as part of our Current Report on Form 8-K.
|
3.02
|
Bylaws
|
Filed with the SEC on October 22, 2010 as part of our Registration Statement on Form S-1.
|
10.01
|
Securities Purchase Agreement between Solo International, Inc. and Craigstone Ltd., dated November 4, 2012
|
Filed with the SEC on November 15, 2012 as part of our Current Report on Form 8-K.
|
10.02
|
Option Agreement by and between Solo International, Inc. and 9228-6202 Quebec Inc., dated November 15, 2012
|
Filed with the SEC on November 23, 2012 as part of our Current Report on Form 8-K
|
10.03
|
Amended Option Agreement by and between 9252-4768 Quebec Inc. and 9228-6202 Quebec Inc. dated December 20, 2012
|
Filed with the SEC on January 3, 2013 as part of our Amended Current Report on Form 8-K/A.
|
10.04
|
Securities Purchase Agreement between Solo International, Inc. and Craigstone Ltd., dated January 10, 2013
|
Filed with the SEC on January 12, 2013 as part of our Current Report on Form 8-K.
|
10.05
|
Employment agreement between the Company and Michael Jacob Cooper Smith dated September 30, 2013
|
Filed with the SEC on December 30, 2013 as part of our annual report on Form 10-K
|
10.06
|
Securities Purchase Agreement with Asher Enterprises Inc. dated September 18, 2013
|
Filed with the SEC on December 30, 2013 as part of our annual report on Form 10-K
|
10.07
|
Securities Purchase Agreement with Asher Enterprises Inc. dated December 18, 2013
|
Filed with the SEC on December 30, 2013 as part of our annual report on Form 10-K
|
10.08
|
October 14, 2014 Convertible Promissory Note between the Company and Investor Growth LLC
|
Filed herewith.
|
10.09
|
December 15, 2014 Convertible Promissory Note between the Company and Level Up Investments LLC
|
Filed herewith.
|
10.10
|
December 29, 2014 Convertible Promissory Note between the Company and Level Up Investments LLC
|
Filed herewith.
|
31.1
|
Certification of Principal Executive Officer Pursuant to Rule 13a-14
|
Filed herewith.
|
31.2
|
Certification of Principal Financial Officer Pursuant to Rule 13a-14
|
Filed herewith.
|
32.1
|
CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act
|
Filed herewith.
|
101.INS*
|
XBRL Instance Document
|
To be filed by amendment
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
To be filed by amendment
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
To be filed by amendment
|
101.LAB*
|
XBRL Taxonomy Extension Labels Linkbase Document
|
To be filed by amendment
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
To be filed by amendment
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
To be filed by amendment
|
SOLO INTERNATIONAL, INC.
|
|||
Date: February 23, 2015
|
By:
|
/s/Michael Cooper Smith
|
|
Name:
|
Michael Cooper Smith
|
||
Title:
|
President, Principal Executive Officer & Principal Financial Officer (Principal Accounting Officer)
|
|
(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
Date: February 23, 2015
|
By:
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/s/ Michael Cooper Smith | |
Name: Michael Cooper Smith | |||
Title: Principal Executive Officer | |||
|
(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
Date: February 23, 2015
|
By:
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/s/ Michael Cooper Smith | |
Name: Michael Cooper Smith | |||
Title: Principal Financial and Accounting Officer | |||
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 23, 2015
|
By:
|
/s/Michael Cooper Smith | |
Name:
|
Michael Cooper Smith
|
||
Title:
|
Principal Executive, Financial and Accounting Officer
|
1.
|
Interest. From the date of issuance of this Note and thereafter until maturity or earlier repayment in full of outstanding Indebtedness, interest shall be calculated on the basis of a 360-day year and shall be computed for each payment period on the basis of the actual number of days elapsed for each such Advance Loan (including the first day but excluding the last day), and accrue at 5% per annum.
|
a.
|
All payments of principal and interest hereunder shall be payable to Lender in lawful money of the United States of America in immediately available funds. All delivery of payments shall be made at the offices of Lender, or at such other place as Lender may designate, not later than 2 p.m. on the date due.
|
b.
|
Prepayments. Maker may prepay the unpaid balance of any of the Indebtedness, in whole or in part without penalty; provided that any such prepayment is accompanied by interest accrued and unpaid on the amount so prepaid to the date of such repayment.
|
c.
|
Interest Rate for Overdue Amounts. Beginning one day after the Maturity Date, interest shall accrue on all unpaid Indebtedness at a rate of 12% per annum (the “Default Rate”).
|
3.
|
Assignment. Maker may not assign, transfer, or dispose of this Note, or any of its interests, rights or obligations hereunder, without the prior written consent of Lender.
|
a.
|
The occurrence of any of the following shall constitute an “Event of Default” under this Note.
|
(i)
|
The failure of Maker to pay any part of the Indebtedness when due.
|
(ii)
|
The institution of legal proceedings against the Maker under any state insolvency laws, federal bankruptcy law, or similar debtor relief laws then in effect.
|
b.
|
In the event of (a)(i) or (a)(ii) above, then a default may be declared at the option of the Lender without presentment, demand, protest or further notice of any kind (all of which are hereby expressly waived by Maker). In such event Lender shall be entitled to be paid in full the balance of any unpaid principal amount hereunder plus all accrued and unpaid interest hereunder and any costs to enforce the terms hereof, including, without limitation, reasonable attorney’s fees. Lender may waive any Event of Default before or after it occurs and may restore this 5% Convertible Promissory Note in full effect without impairing the right to declare it due for a subsequent default.
|
c.
|
No course of dealing between Lender and Maker or any failure or delay on the part of Lender in exercising any rights or remedies hereunder shall operate as a waiver of any rights or remedies of Lender under this or any other applicable instrument. No single or partial exercise of any rights or remedies hereunder shall operate as a waiver or preclude the exercise of any other rights or remedies.
|
d.
|
Lender is empowered to set off and apply any moneys at any time held or any other indebtedness at any time due and payable by Lender to or for the credit of Maker against the indebtedness of Maker evidenced by this Note. Lender shall promptly notify Maker after any such set-off, provided that the failure to provide notice shall not affect the validity of this set-off.
|
e.
|
None of the rights, remedies, privileges or powers of Lender expressly provided for herein shall be exclusive, but each of them shall be cumulative with and in addition to every other right, remedy, privilege and power now or hereafter existing in favor of Lender, whether at law or in equity, by statute or otherwise.
|
f.
|
Maker shall pay all reasonable expenses of any nature, whether incurred in or out of court, and whether incurred before or after this Note shall become due at its maturity date or otherwise (including but not limited to reasonable attorneys’ fees and costs) which Lender may deem necessary or proper in connection with the satisfaction of indebtedness.
|
6.
|
Conversion. At any such date as the Lender may desire on or after the Maturity Date of this Note, any unpaid Indebtedness shall be convertible into common shares of the Maker at a price per share of $0.0004 granted, however, that at no time may the Lender convert any Indebtedness into a number of shares which would result in a total beneficial ownership by the Lender of a number of shares greater than 4.99% of the Maker's total Outstanding Common Shares at the time of conversion.
|
a)
|
Adjustment Due to Merger, Consolidation, or Combination. If, prior to repayment or conversion of this Note, there shall be any merger, consolidation, exchange of shares, reorganization, forward- or reverse-split, or other similar event, as a result of which the Common Stock of the Company shall be changed into the same or a different number of shares of the new entity (the “Business Combination”), then the Holder of this Note shall thereafter have the right to receive upon conversion, upon the same terms and conditions specified herein, the Common Stock of the new entity evidenced by its public securities.
|
b)
|
Non-Dilution. If, prior to the conversion of this Note, the number of outstanding shares of the Common Stock of the Company is increased or decreased by any stock split, reclassification of shares, stock dividend, or other event or corporate action, the conversion terms described above in Section 6 of this Note and the number of shares of Common Stock issuable upon enforcement of the conversion terms shall be unaffected.
|
8.
|
Severability. In the event any one or more of the provisions contained in this Note or any other loan document shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or enforceability shall not affect any other provision of this Note or such other loan documents, but this Note and such other loan document shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein or therein.
|
9.
|
Amendment. Any provision of this Note may be amended, waived, or modified, upon the written consent of both the Maker and the Lender, provided that the Lender is the owner of no less than 90% of the Indebtedness described herein.
|
10.
|
Certifications. Should Lender require any Certifications by the Maker, as may be required to deposit any converted shares of the Common Stock, testifying to the validity of this Note or to the Lender’s status in relation to the Company, Maker shall provide said Certifications within 2 (two) business days from notification by Lender.
|
11.
|
Representation and Warranty. Maker hereby declares, represents and warrants to Lender that is a business or commercial organization and that the indebtedness evidenced hereby is made for the purpose of acquiring or caring on a business or commercial enterprise within the meaning of the laws of the State of Nevada.
|
12.
|
Waiver of Trial by Jury. Maker agrees that any suit, action or proceeding, whether claim or counterclaim, brought or instituted by Lender on or with respect to this Note shall be tried only by a court and not by a jury. MAKER HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. Maker acknowledges and agrees that Lender would not extend credit hereunder if this waiver of a jury trial were not part of this Note.
|
13.
|
Governing Law. This Note shall be construed in accordance with and governed by the laws of the State of Nevada, without regard to its principals or conflicts of law.
|
1.
|
Interest. From the date of issuance of this Note and thereafter until maturity or earlier repayment in full of outstanding Indebtedness, interest shall be calculated on the basis of a 365-day year and shall be computed for each payment period on the basis of the actual number of days elapsed for each such Advance Loan (including the first day but excluding the last day), and accrue at 5% per annum.
|
2.
|
Payments.
|
a.
|
All payments of principal and interest hereunder shall be payable to Lender in lawful money of the United States of America in immediately available funds. All delivery of payments shall be made at the offices of Lender, or at such other place as Lender may designate, not later than 2 p.m. on the date due.
|
b.
|
Prepayments. Maker may prepay the unpaid balance of any of the Indebtedness, in whole or in part without penalty; provided that any such prepayment is accompanied by interest accrued and unpaid on the amount so prepaid to the date of such repayment.
|
c.
|
Interest Rate for Overdue Amounts. Beginning one day after the Maturity Date, interest shall accrue on all unpaid Indebtedness at a rate of 12% per annum (the “Default Rate”).
|
3.
|
Assignment. Maker may not assign, transfer, or dispose of this Note, or any of its interests, rights or obligations hereunder, without the prior written consent of Lender.
|
4.
|
Default and Acceleration:
|
a.
|
The occurrence of any of the following shall constitute an “Event of Default” under this Note.
|
(i)
|
The failure of Maker to pay any part of the Indebtedness when due.
|
(ii)
|
The institution of legal proceedings against the Maker under any state insolvency laws, federal bankruptcy law, or similar debtor relief laws then in effect.
|
b.
|
In the event of (a)(i) or (a)(ii) above, then a default may be declared at the option of the Lender without presentment, demand, protest or further notice of any kind (all of which are hereby expressly waived by Maker). In such event Lender shall be entitled to be paid in full the balance of any unpaid principal amount hereunder plus all accrued and unpaid interest hereunder and any costs to enforce the terms hereof, including, without limitation, reasonable attorney’s fees. Lender may waive any Event of Default before or after it occurs and may restore this 5% Convertible Promissory Note in full effect without impairing the right to declare it due for a subsequent default.
|
c.
|
No course of dealing between Lender and Maker or any failure or delay on the part of Lender in exercising any rights or remedies hereunder shall operate as a waiver of any rights or remedies of Lender under this or any other applicable instrument. No single or partial exercise of any rights or remedies hereunder shall operate as a waiver or preclude the exercise of any other rights or remedies.
|
d.
|
Lender is empowered to set off and apply any moneys at any time held or any other indebtedness at any time due and payable by Lender to or for the credit of Maker against the indebtedness of Maker evidenced by this Note. Lender shall promptly notify Maker after any such set-off, provided that the failure to provide notice shall not affect the validity of this set-off.
|
e.
|
None of the rights, remedies, privileges or powers of Lender expressly provided for herein shall be exclusive, but each of them shall be cumulative with and in addition to every other right, remedy, privilege and power now or hereafter existing in favor of Lender, whether at law or in equity, by statute or otherwise.
|
f.
|
Maker shall pay all reasonable expenses of any nature, whether incurred in or out of court, and whether incurred before or after this Note shall become due at its maturity date or otherwise (including but not limited to reasonable attorneys’ fees and costs) which Lender may deem necessary or proper in connection with the satisfaction of indebtedness.
|
6.
|
Conversion. At any such date as the Lender may desire on or after the Maturity Date of this Note, any unpaid Indebtedness shall be convertible into common shares of the Maker at a price per share equal to 50% of the lowest posted trade price of SLIO within the last 20 trading sessions; granted, however, that at no time may the Lender convert any Indebtedness into a number of shares which would result in a total beneficial ownership by the Lender of a number of shares greater than 4.99% of the Maker's total Outstanding Common Shares at the time of conversion.
|
7.
|
Survival of Debt and Non-Dilution.
|
a)
|
Adjustment Due to Merger, Consolidation, or Combination. If, prior to repayment or conversion of this Note, there shall be any merger, consolidation, exchange of shares, reorganization, forward- or reverse-split, or other similar event, as a result of which the Common Stock of the Company shall be changed into the same or a different number of shares of the new entity (the “Business Combination”), then the Holder of this Note shall thereafter have the right to receive upon conversion, upon the same terms and conditions specified herein, the Common Stock of the new entity evidenced by its public securities.
|
b)
|
Non-Dilution. If, prior to the conversion of this Note, the number of outstanding shares of the Common Stock of the Company is increased or decreased by any stock split, reclassification of shares, stock dividend, or other event or corporate action, the conversion terms described above in Section 6 of this Note and the number of shares of Common Stock issuable upon enforcement of the conversion terms shall be unaffected.
|
8.
|
Severability. In the event any one or more of the provisions contained in this Note or any other loan document shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or enforceability shall not affect any other provision of this Note or such other loan documents, but this Note and such other loan document shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein or therein.
|
9.
|
Amendment. Any provision of this Note may be amended, waived, or modified, upon the written consent of both the Maker and the Lender, provided that the Lender is the owner of no less than 90% of the Indebtedness described herein.
|
10.
|
Certifications. Should Lender require any Certifications by the Maker, as may be required to deposit any converted shares of the Common Stock, testifying to the validity of this Note or to the Lender’s status in relation to the Company, Maker shall provide said Certifications within 2 (two) business days from notification by Lender.
|
11.
|
Representation and Warranty. Maker hereby declares, represents and warrants to Lender that is a business or commercial organization and that the indebtedness evidenced hereby is made for the purpose of acquiring or caring on a business or commercial enterprise within the meaning of the laws of the State of Nevada.
|
12.
|
Waiver of Trial by Jury. Maker agrees that any suit, action or proceeding, whether claim or counterclaim, brought or instituted by Lender on or with respect to this Note shall be tried only by a court and not by a jury. MAKER HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. Maker acknowledges and agrees that Lender would not extend credit hereunder if this waiver of a jury trial were not part of this Note.
|
13.
|
Governing Law. This Note shall be construed in accordance with and governed by the laws of the State of Nevada, without regard to its principals or conflicts of law.
|
1.
|
Interest. From the date of issuance of this Note and thereafter until maturity or earlier repayment in full of outstanding Indebtedness, interest shall be calculated on the basis of a 365-day year and shall be computed for each payment period on the basis of the actual number of days elapsed for each such Advance Loan (including the first day but excluding the last day), and accrue at 5% per annum.
|
2.
|
Payments.
|
a.
|
All payments of principal and interest hereunder shall be payable to Lender in lawful money of the United States of America in immediately available funds. All delivery of payments shall be made at the offices of Lender, or at such other place as Lender may designate, not later than 2 p.m. on the date due.
|
b.
|
Prepayments. Maker may prepay the unpaid balance of any of the Indebtedness, in whole or in part without penalty; provided that any such prepayment is accompanied by interest accrued and unpaid on the amount so prepaid to the date of such repayment.
|
c.
|
Interest Rate for Overdue Amounts. Beginning one day after the Maturity Date, interest shall accrue on all unpaid Indebtedness at a rate of 12% per annum (the “Default Rate”).
|
3.
|
Assignment. Maker may not assign, transfer, or dispose of this Note, or any of its interests, rights or obligations hereunder, without the prior written consent of Lender.
|
4.
|
Default and Acceleration:
|
a.
|
The occurrence of any of the following shall constitute an “Event of Default” under this Note.
|
(i)
|
The failure of Maker to pay any part of the Indebtedness when due.
|
(ii)
|
The institution of legal proceedings against the Maker under any state insolvency laws, federal bankruptcy law, or similar debtor relief laws then in effect.
|
b.
|
In the event of (a)(i) or (a)(ii) above, then a default may be declared at the option of the Lender without presentment, demand, protest or further notice of any kind (all of which are hereby expressly waived by Maker). In such event Lender shall be entitled to be paid in full the balance of any unpaid principal amount hereunder plus all accrued and unpaid interest hereunder and any costs to enforce the terms hereof, including, without limitation, reasonable attorney’s fees. Lender may waive any Event of Default before or after it occurs and may restore this 5% Convertible Promissory Note in full effect without impairing the right to declare it due for a subsequent default.
|
c.
|
No course of dealing between Lender and Maker or any failure or delay on the part of Lender in exercising any rights or remedies hereunder shall operate as a waiver of any rights or remedies of Lender under this or any other applicable instrument. No single or partial exercise of any rights or remedies hereunder shall operate as a waiver or preclude the exercise of any other rights or remedies.
|
d.
|
Lender is empowered to set off and apply any moneys at any time held or any other indebtedness at any time due and payable by Lender to or for the credit of Maker against the indebtedness of Maker evidenced by this Note. Lender shall promptly notify Maker after any such set-off, provided that the failure to provide notice shall not affect the validity of this set-off.
|
e.
|
None of the rights, remedies, privileges or powers of Lender expressly provided for herein shall be exclusive, but each of them shall be cumulative with and in addition to every other right, remedy, privilege and power now or hereafter existing in favor of Lender, whether at law or in equity, by statute or otherwise.
|
f.
|
Maker shall pay all reasonable expenses of any nature, whether incurred in or out of court, and whether incurred before or after this Note shall become due at its maturity date or otherwise (including but not limited to reasonable attorneys’ fees and costs) which Lender may deem necessary or proper in connection with the satisfaction of indebtedness.
|
6.
|
Conversion. At any such date as the Lender may desire on or after the Maturity Date of this Note, any unpaid Indebtedness shall be convertible into common shares of the Maker at a price per share equal to 50% of the lowest posted trade price of SLIO within the last 20 trading sessions; granted, however, that at no time may the Lender convert any Indebtedness into a number of shares which would result in a total beneficial ownership by the Lender of a number of shares greater than 4.99% of the Maker's total Outstanding Common Shares at the time of conversion.
|
7.
|
Survival of Debt and Non-Dilution.
|
a)
|
Adjustment Due to Merger, Consolidation, or Combination. If, prior to repayment or conversion of this Note, there shall be any merger, consolidation, exchange of shares, reorganization, forward- or reverse-split, or other similar event, as a result of which the Common Stock of the Company shall be changed into the same or a different number of shares of the new entity (the “Business Combination”), then the Holder of this Note shall thereafter have the right to receive upon conversion, upon the same terms and conditions specified herein, the Common Stock of the new entity evidenced by its public securities.
|
b)
|
Non-Dilution. If, prior to the conversion of this Note, the number of outstanding shares of the Common Stock of the Company is increased or decreased by any stock split, reclassification of shares, stock dividend, or other event or corporate action, the conversion terms described above in Section 6 of this Note and the number of shares of Common Stock issuable upon enforcement of the conversion terms shall be unaffected.
|
8.
|
Severability. In the event any one or more of the provisions contained in this Note or any other loan document shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or enforceability shall not affect any other provision of this Note or such other loan documents, but this Note and such other loan document shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein or therein.
|
9.
|
Amendment. Any provision of this Note may be amended, waived, or modified, upon the written consent of both the Maker and the Lender, provided that the Lender is the owner of no less than 90% of the Indebtedness described herein.
|
10.
|
Certifications. Should Lender require any Certifications by the Maker, as may be required to deposit any converted shares of the Common Stock, testifying to the validity of this Note or to the Lender’s status in relation to the Company, Maker shall provide said Certifications within 2 (two) business days from notification by Lender.
|
11.
|
Representation and Warranty. Maker hereby declares, represents and warrants to Lender that is a business or commercial organization and that the indebtedness evidenced hereby is made for the purpose of acquiring or caring on a business or commercial enterprise within the meaning of the laws of the State of Nevada.
|
12.
|
Waiver of Trial by Jury. Maker agrees that any suit, action or proceeding, whether claim or counterclaim, brought or instituted by Lender on or with respect to this Note shall be tried only by a court and not by a jury. MAKER HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. Maker acknowledges and agrees that Lender would not extend credit hereunder if this waiver of a jury trial were not part of this Note.
|
13.
|
Governing Law. This Note shall be construed in accordance with and governed by the laws of the State of Nevada, without regard to its principals or conflicts of law.
|