*********EMPIRE*********

[MONEYMADE]

FAIR ENOUGH....BUT ARE YOU AWARE OF VGTL-NOTES UP THE WAAZOOO!

ENTERTAINMENT AND MINING COMPANIES ARE THE WORST POS DILUTION SCAMS ON THE PINKYS....INVESTORS JUST FINANCE SOME LAME INSIDER'S DREAMS IMO. NO AMOUNT OF NEWS WILL MOVE THIS DILUTION.

NOTE 5 – NOTES PAYABLE

The Company borrowed $987,197 from third party lenders for the nine months ended December 31, 2014. One note for $200,000 was due September 1, 2014 but has not yet been paid in full. The other notes are due on various dates from March 8, 2015 through September 1, 2015, incur interest at 8% - 12% per annum and are convertible at rates of 55% to 60% of the average from the lowest to the third lowest trading price for the ten to twenty trading days prior to the conversion. Except one note of $75,000 is convertible immediately after issuance, other notes become convertible after 180 days following the issuance of the notes.


7


The Company borrowed $579,500 from third party lenders for the year ended March 31, 2014. $218,500 of these notes are convertible at $0.10 per share, 180 days after the issuance of the note and contains a reset provision which may decrease the convertible price if the Company issues any dilutive instruments. $100,000 of these notes are convertible at $0.33 per share, 180 days after the issuance of the note and contains a reset provision which may decrease the convertible price if the Company issues any dilutive instruments. $261,000 of these notes payable are convertible at 58% of the average of the lowest 3 trading day prices in the 10 days prior to conversion of the note. These notes become convertible after 180 days of cash receipt. The Company analyzed the conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the instruments should be classified as a liability once the conversion option becomes effective after 180 days due to there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. Additionally, the instruments were evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion features. The Company determined the beneficial conversion feature for all convertible notes to be $212,297 which was recognized as a debt discount and will be amortized over the term of the notes.

In addition to the above notes payable, the Company’s subsidiary borrowed $200,000, of which $89,197 was borrowed in the nine months ended December 31, 2014. These notes are for 24 months and carry a 20% interest rate per annum plus 50,000 shares of the Company per $100,000 loaned.

On June 23, 2014, a third party entered into a debt purchase agreement to purchase the Company’s outstanding debt of $50,000 principal and $2,729 accrued interest. In accordance with ASC470-50, this transaction is accounted as debt extinguishment, and the Company recognized a derivative loss $86,844.

During the nine months ended December 31, 2014, short term debt holders converted $174,667 of short term debt and accrued interest into common stock. There were no conversions for the corresponding period of the prior year. In addition, the Company repaid $120,000 and accrued interest to debt holders. No such repayments were made in the prior year.

For the nine months ended December 31, 2014, total derivative loss on debt settlement was $193,497.

As of December 31, 2014 and March 31, 2014, the Company had a short term debt balance of $1,028,408 and $531,084, respectively.