x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED June 30, 2013
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ______________
|
Delaware
|
000-24370
|
33-0565710
|
||
(State or other jurisdiction of incorporation)
|
(Commission File No.)
|
(IRS Employer Identification No.)
|
Part I. Financial Information
|
||
Item 1.
|
Unaudited Consolidated Financial Statements
|
|
Unaudited Condensed Consolidated Balance Sheets as of June 30, 2013 and March 31, 2013
|
3
|
|
Unaudited Condensed Consolidated Statements of Operations for the three months ended June 30, 2013 and 2012 and for the period from inception, September 16, 2002 to June 30, 2013
|
4
|
|
Unaudited Consolidated Statements of Cash Flows for the three months ended June 30, 2013 and 2012 and for the period from inception, September 16, 2002, to June 30, 2013.
|
5
|
|
Notes to the Unaudited Consolidated Financial Statements
|
6
|
|
Item 2.
|
Management’s Discussion and Analysis or Plan of Operation
|
9
|
Item 3
|
Quantitative and Qualitative Disclosures about Market Risk
|
12
|
Item 4.
|
Controls and Procedures
|
12
|
Part II. Other Information
|
||
Item 1.
|
Legal Proceedings
|
13
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
13
|
Item 3.
|
Defaults Upon Senior Securities
|
13
|
Item 4.
|
Submission of Matters to a Vote of Security Holders
|
13
|
Item 5.
|
Other Information
|
14
|
Item 6.
|
Exhibits
|
14
|
Signatures
|
14
|
June 30,
2013
|
March 31,
2013
|
|||||||
ASSETS
|
(Unaudited)
|
(Unaudited)
|
||||||
Current assets:
|
||||||||
Cash
|
$ | - | $ | - | ||||
Inventory, net
|
18,409 | 18,409 | ||||||
Total current assets
|
18,409 | 18,409 | ||||||
Fixed assets –cost
|
22,250 | 22,250 | ||||||
Less: accumulated depreciation
|
(22,250 | ) | (22,250 | ) | ||||
Net fixed assets
|
- | - | ||||||
Total assets
|
$ | 18,409 | $ | 18,409 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued liabilities
|
$ | 3,618,680 | $ | 3,377.328 | ||||
Note payable - short term
|
240,615 | 240,615 | ||||||
Total current liabilities
|
3,859,295 | 3,617,943 | ||||||
Long term liabilities:
|
||||||||
Note payable
|
483,000 | 483,000 | ||||||
Total long term liabilities
|
483,000 | 483,000 | ||||||
Total liabilities
|
4,342,295 | 4,100,943 | ||||||
Shareholders' equity (deficit)
|
||||||||
Preferred shares - $0.001 par value; 1,000,000 authorized, no shares issued or outstanding
|
- | - | ||||||
Common shares - $0.001 par value; 199,000,000 authorized; 305,778 and 305,778 shares issued and outstanding, respectively
|
306 | 306 | ||||||
Additional paid-in-capital
|
6,148,229 | 6,148,229 | ||||||
Deficit accumulated during development stage
|
(10,472,421 | ) | (10,231,069 | ) | ||||
Total shareholders' equity (deficit)
|
(4,323,886 | ) | (4,082,534 | ) | ||||
Total liabilities and shareholders' equity (deficit)
|
$ | 18,409 | 18,409 |
Three Months Ended | Inception to | |||||||||||
June 30, | June 30, | June 30, | ||||||||||
2013 | 2012 | 2013 | ||||||||||
(Unaudited) | (Unaudited) | |||||||||||
Sales
|
$ | - | $ | - | $ | 18,500 | ||||||
Cost of Sales
|
- | - | (18,032 | ) | ||||||||
Gross Profit
|
- | - | 468 | |||||||||
|
||||||||||||
Expenses:
|
||||||||||||
General and administrative
|
193,460 | 149,286 | 8,868,685 | |||||||||
Depreciation
|
- | 1,113 | 24,106 | |||||||||
Research and development
|
- | - | 226,108 | |||||||||
Total expenses
|
193,460 | 150,399 | 9,118,899 | |||||||||
Income (loss) from operations
|
(193,460 | ) | (150,399 | ) | (9,118,431 | ) | ||||||
Interest expense
|
(47,892 | ) | (37,432 | ) | (723,195 | ) | ||||||
Other income (expense)
|
- | - | (630,795 | ) | ||||||||
Net income (loss) before income taxes
|
(241,352 | ) | (187,831 | ) | (10,472,421 | ) | ||||||
Provision for income taxes
|
- | - | - | |||||||||
Net income (loss) after income taxes
|
$ | (241,352 | ) | $ | (187,831 | ) | $ | (10,472,421 | ) | |||
|
||||||||||||
Weighted Average Shares Outstanding - basic and diluted *
|
305,778 | 305,778 | ||||||||||
Basic and diluted income (loss) per share
|
||||||||||||
Continuing Operations
|
$ | (0.79 | ) | $ | (0.61 | ) | ||||||
Net Income (Loss)
|
$ | (0.79 | ) | $ | (0.61 | ) |
Three Months Ended
|
Inception to
|
|||||||||||
June 30,
2013
|
June 30,
2012
|
June 30,
2013
|
||||||||||
Cash Flows from Operating Activities:
|
|
|
||||||||||
Net Loss
|
$ | (241,352 | ) | $ | (187,831 | ) | $ | (10,472,421 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||||||
Stock for services
|
- | 24,786 | 5,114,493 | |||||||||
Depreciation
|
- | 1,113 | 24,106 | |||||||||
Net discount on convertible debt
|
- | - | 206,324 | |||||||||
Loss due to Impairment / Gain on restructuring
|
- | - | 630,795 | |||||||||
Changes in:
|
||||||||||||
Inventory and other current assets
|
- | - | (4,869 | ) | ||||||||
Accounts payable and accrued liabilities
|
241,352 | 161,932 | 4,113,974 | |||||||||
Net cash used in operating activities
|
- | - | (387,598 | ) | ||||||||
|
||||||||||||
Cash Flows from Investing Activities:
|
||||||||||||
Fixed asset / Other asset purchases
|
- | - | (189,541 | ) | ||||||||
Net cash used in investing activities
|
- | - | (189,541 | ) | ||||||||
|
||||||||||||
Cash Flows from Financing Activities:
|
||||||||||||
Net Proceeds from general financing
|
- | - | 657,500 | |||||||||
Net Proceeds (payments) from shareholder / officers
|
- | - | (113,947 | ) | ||||||||
Proceeds from issuance of common stock
|
- | - | 33,586 | |||||||||
Net cash provided by financing activities
|
- | - | 577,139 | |||||||||
Net increase (decrease) in cash
|
- | - | - | |||||||||
Beginning of period - continuing operations
|
- | - | - | |||||||||
End of period - continuing operations
|
$ | - | $ | - | $ | - | ||||||
Cash paid for interest
|
$ | - | $ | - | $ | 18,295 | ||||||
Cash paid for income taxes
|
$ | - | $ | - | $ | - |
Interest expense
|
June 30,
2013
|
June 30,
2012
|
||||||
Interest – Johnson
|
1,299 | 1,299 | ||||||
Interest – Dutro Group
|
9,056 | 9,056 | ||||||
Interest - Employee Group
|
34,457 | 24,337 | ||||||
Interest – Other Notes
|
3,080 | 2,740 | ||||||
Total interest expense
|
$ | 47,892 | $ | 37,432 |
Note Payable Balance
|
June 30,
2013
|
March 31,
2013
|
||||||
Edward Johnson – Johnson Financing
|
$ | 86,615 | $ | 86,615 | ||||
Patrick Madison – Other Notes
|
20,000 | 20,000 | ||||||
Lionel Brown – Other Notes
|
20,000 | 20,000 | ||||||
Patricia Fielding – Other Notes
|
22,000 | 22,000 | ||||||
Mark Madison – Other Notes
|
10,000 | 10,000 | ||||||
Richard Long – Other Notes
|
17,000 | 17,000 | ||||||
Asher Enterprises, Inc. – Other Notes
|
65,000 | 65,000 | ||||||
Total Note Payable – short term
|
$ | 240,615 | $ | 240,615 | ||||
Vicki Davis - Dutro Group
|
$ | 168,000 | $ | 168,000 | ||||
William Dutro – Dutro Group
|
65,000 | 65,000 | ||||||
Dutro Company – Dutro Group
|
250,000 | 250,000 | ||||||
Total Note Payable – long term
|
$ | 483,000 | $ | 483,000 | ||||
Total Notes Payable
|
$ | 723,615 | $ | 723,615 |
Fiscal Year
|
Amount
|
|||
March 31, 2014
|
$ | 240,615 | ||
March 31, 2015
|
$ | 483,000 | ||
March 31, 2016
|
$ | 0 | ||
Total
|
$ | 723,615 |
1)
|
Litigation involving various parties continues and is expected to continue for the foreseeable future. The impact of the issues surrounding the litigation impact the Company’s ability to obtain funding needed to operate the Company according to their strategic plans.
|
Three Months Ended
|
Three Months Ended
|
|||||
June 30,
|
June 30,
|
|||||
Sources and Uses of Cash
|
2013
|
2012
|
||||
Net cash provided by / (used in)
|
||||||
Operating activities
|
$
|
-
|
$
|
-
|
||
Investing activities
|
-
|
-
|
||||
Financing activities
|
-
|
-
|
||||
Increase/(decrease) in cash and cash equivalents
|
$
|
-
|
$
|
-
|
||
Period ended June 30, 2013 and 2012
|
||||||
Cash and cash equivalents
|
$
|
-
|
$
|
-
|
·
|
The Company has not generated revenues and has not executed any significant contracts for the sale of the Company’s products.
|
·
|
The Company uses outside sources to fulfill contract obligations and has limited control over the provider’s ability to meet the Company obligations.
|
·
|
The directors, executive officers and principal shareholders of the Company have effective control of the Company, preventing non-affiliate shareholders from significantly influencing the Company’s direction and future.
|
·
|
The Company relies on outsourced manufacturers for the production of all Sector 10 products. Litigation is pending regarding the breach of contract by the former outsourced manufacturer and other issues resulting in indefinite delays in production capability and capacity.
|
·
|
The market for the Company’s stock is thin and subject to manipulation.
|
·
|
The market price for the Common Stock is volatile and may change dramatically at any time.
|
·
|
Our business may be affected by increased compensation and benefits costs.
|
·
|
The Company has not paid dividends and does not anticipate paying dividends in the future.
|
·
|
The Common Stock is a “low-priced stock” or “penny stock” and subject to regulation that limits or restricts the potential market for the stock.
|
·
|
Compliance with existing and new regulations of corporate governance and public disclosure may result in additional expenses.
|
(a)
|
Based on the evaluation of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) required by paragraph (b) of Rules 13a-15 or 15d-15, the Company’s principal executive officer and principal financial officer concluded that as of June 30, 2013, the Company’s disclosure controls and procedures were effective.
|
(b)
|
There have been no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
|
Exhibit | ||
|
||
31.1
|
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
31.2
|
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification of the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2
|
Certification of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101 INS
|
XBRL Instance Document*
|
|
101 SCH
|
XBRL Schema Document*
|
|
101 CAL
|
XBRL Calculation Linkbase Document*
|
|
101 DEF
|
XBRL Definition Linkbase Document*
|
|
101 LAB
|
XBRL Labels Linkbase Document*
|
|
101 PRE
|
XBRL Presentation Linkbase Document*
|
Sector 10, Inc.
|
|||
August 19, 2013
|
By: /s/ Pericles DeAvila
|
||
Date
|
Pericles DeAvila, President
|
||
August 19, 2013
|
By: /s/ Laurence A. Madison
|
||
Date
|
Laurence A. Madison
Chief Financial Officer
|
1.
|
I have reviewed this quarterly report on 10-Q of Sector 10, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
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;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
1.
|
I have reviewed this quarterly report on 10-Q of Sector 10, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
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;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
(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 the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
(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 the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
Note 2 - Inventory (Details) (USD $)
|
Dec. 31, 2012
|
---|---|
Details | |
InventoryValuationReserves | $ 12,491 |
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
|
3 Months Ended | 129 Months Ended | |
---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS | |||
Sales | $ 18,500 | ||
Cost of Sales | (18,032) | ||
Gross Profit | 468 | ||
General and administrative | 193,460 | 149,286 | 8,868,685 |
Depreciation | 1,113 | 24,106 | |
Research and development | 226,108 | ||
Total expenses | 193,460 | 150,399 | 9,118,899 |
Income (loss) from operations | (193,460) | (150,399) | (9,118,431) |
Interest expense | (47,892) | (37,432) | (723,195) |
Other income (expense) | (630,795) | ||
Net income (loss) before income taxes | (241,352) | (187,831) | (10,472,421) |
Net income (loss) after income taxes | $ (241,352) | $ (187,831) | $ (10,472,421) |
Weighted Average Shares Outstanding - basic and diluted * | 305,778 | 305,778 | |
Continuing Operations | $ (0.79) | $ (0.61) | |
Net Income (Loss) | $ (0.79) | $ (0.61) |
Note 4 - Equity
|
3 Months Ended |
---|---|
Jun. 30, 2013
|
|
Notes | |
Note 4 - Equity | Note 4 EQUITY
During the Quarter ended: June 30, 2013:
No equity transactions occurred in the period ended June 30, 2013.
|
Note 3 - Notes Payable (Details) (USD $)
|
3 Months Ended | 129 Months Ended | |
---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2013
|
Dec. 31, 2012
|
|
Details | |||
Johnson Financing - Interest Accrued | $ 1,299 | $ 1,299 | |
Dutro Company - Interest Accrued | 4,687 | 4,687 | |
Vick Davis - Interest Accrued | 3,250 | 3,250 | |
William Dutro - Interest Accrued | 1,219 | 1,219 | |
Total Contingent Reserve -Interest | 125,560 | 125,560 | |
Total Contingent Reserve -Interest - Dutro Company | 73,135 | 73,135 | |
Total Contingent Reserve -Interest - Vick Davis | 37,800 | ||
Total Contingent Reserve -Interest - William Dutro | 14,625 | 14,625 | |
Accrual of interest on unpaid wages and other compensation | 24,497 | 251,925 | |
Inividuals - short-term Interest accrued | 1,780 | 23,576 | |
Asher Enterprises, Inc. - Interest Accrued | $ 1,300 | $ 17,402 |
CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIT (USD $)
|
Jun. 30, 2013
|
Mar. 31, 2012
|
---|---|---|
Balance | $ (4,323,886) | $ (4,082,534) |
Balance | $ (4,323,886) | $ (4,082,534) |
Note 2 - Inventory
|
3 Months Ended |
---|---|
Jun. 30, 2013
|
|
Notes | |
Note 2 - Inventory | Note 2 INVENTORY
There were no sales in the three month period ended June 30, 2013. Therefore, total inventory remains at $18,409 for the three month period ended June 30, 2013. The carrying value of inventory is periodically reviewed and impairments, if any, are recognized when the expected future benefit from the inventory is less than its carrying value. If applicable, the Company will establish inventory reserves for estimated obsolescence or unmarketable inventory which is equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. For the three month period ended June 30, 2013, the Company has a reserve of $12,491.
|
Note 5 - Going Concern
|
3 Months Ended |
---|---|
Jun. 30, 2013
|
|
Notes | |
Note 5 - Going Concern |
Note 5 GOING CONCERN
The Company generated minimal revenues prior to the current fiscal year. No revenues were generated for the three month period ended June 30, 2013. This level of revenues is not sufficient for the Company to meet its future obligations. This factor raises substantial doubt about the Companys ability to continue as a going concern.
The Company is in the midst of the Dutro litigation and other litigation. The litigation has hindered the operation of the Company and have set back the ability to raise capital and develop ongoing business. The Company is in the process of restructuring the business in order to continue forward as a going concern. It is expected that the restructuring will be completed after the current litigation is completed. After the restructuring is completed, revenues are not expected to be generated at the earliest by the end of the year ended March 31, 2014. |
Note 3 - Notes Payable
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 3 - Notes Payable | Note 3 NOTES PAYABLE
Johnson Financing
The interest accrued for the three month period ended June 30, 2013 was $1,299.
Dutro Financing:
The contingent reserve - interest includes all interest accrued on the Dutro Company note and all interest accrued after July 1, 2010 for the Vicki Davis and William Dutro note. Interest accrued during the three month period ended June 30, 2013 was $ 9,056 comprised of Dutro Company - $4,687, Vick Davis - $3,250 and William Dutro - $1,219. Total contingent reserve - interest for the period ended June 30, 2013 is $125,560 comprised of Dutro Company - $73,135, Vick Davis - $37,800 and William Dutro - $14,625.
Employee Agreement:
The financial statements reflect an accrual of interest on unpaid wages and other compensation in the amount of $251,925 of which $24,497 is accrued during the three month period ended June 30, 2013. As of June 30, 2013, no election has been made to convert any portion of the balance due under the agreement to common shares.
Other Notes
Individuals short term
Total interest accrued as of June 30, 2013 was $23,576 of which $1,780 was accrued during the three month period ended June 30, 2013.
Asher Enterprises, Inc.
The Company entered into multiple financing transactions with Asher Enterprises, Inc. to raise capital for Company operations. Each transaction was structured as a Convertible Debenture due 9 months after the issue accruing interest at an annual rate of 8%
Total interest accrued (without discount amortization) as of June 30, 2013 was $17,402 of which $1,300 was accrued during the three month period ended June 30, 2013. The current period interest is included as part of other notes interest.
Summary of Interest and Notes Payable
Debt Maturity Schedule
As of June 30, 2013, the annual maturities for notes payable are scheduled as follows:
|