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Intellectual Property
3 Months Ended
Sep. 30, 2013
Notes  
Intellectual Property

NOTE 5 - INTELLECTUAL PROPERTY

 

On February 25, 2013, the Company announced the acquisition of Le Flav Spirits license agreement for the promotion of a liquor line featuring the celebrity Flavor Flav. As consideration in connection with the acquisition, the Company agreed to issued 360,000 shares of its common stock fair valued at $32,400, warrants to purchase up to two million (2,000,000) shares of the Company’s common stock valued at $180,000 utilizing the Black-Scholes Model, and a convertible promissory note in the amount of $2,000,000. Pursuant to the terms of the agreement, the warrants are subject to specific vesting requirements related to sales benchmarks whereas for each 5,000 cases sold the seller will receive 500,000 fully vested warrants exercisable at a rate of $1.00 per share for a term of five years.  As of September 30, 2013, no warrants have been vested.

 

The convertible promissory note bears interest at a rate of 8% per annum, matures March 1, 2016 and requires payment to be made at an amount equal to $1.00 for each bottle of product sold for the first 2,000,000 bottles sold. This will be treated as a convertible promissory note, convertible at $1.00 per share (at the option of the note holder). Promissory note bears interest at 8% per year. The Company has the ability to make principal and interest payments above what is earned from the 'per bottle' during the term. Unless otherwise satisfied, the balance of the promissory note is due by March 1, 2016. The CEO had a minority interest in the entity from which the license agreement was purchased.