Friday, November 06, 2015 2:20:55 PM
As per the latest 10Q:
On June 1, 2015, the Company issued a convertible note in the principal amount of $100,000 due on demand on or after December 1, 2015. The note has a cash redemption premium of 130% of the principal amount in the first 90 days following the execution date, of 135% for days 90-120 following the execution date, and 140% after the 120th day. After 140 days cash redemption is only available upon approval by the holder. The note bears interest at 12% per annum and is convertible into common shares of the Company at the lower of a 42% discount to the lowest trading price during the previous 20 trading days to the date of conversion; or a 42% discount to the lowest trading price during the previous 20 trading days before the date the note was executed. In no event shall the conversion price be lower than $0.00001.
From the previous 10Q:
On February 17, 2015, the Company issued a convertible note in the principal amount of $125,000. The note has a cash redemption premium of 130% of the principal amount in the first 90 days following the execution date, of 135% for days 90-120 following the execution date, and 140% after the 120th day. After 140 days, cash redemption is only available upon approval by the holder. The note bears interest at 12% per annum and is convertible into common shares of the Company at the lower of (i) 42% discount to the lowest trading price during the previous 20 trading days to the date of conversion or (ii) 42% discount to the lowest trading price during the previous 20 trading days before the date the note was executed.
The embedded conversion option qualifies for derivative accounting and bifurcation under ASC 815-15 Derivatives and Hedging. The initial fair value of the conversion feature of $160,244 resulted in a discount to the note payable of $125,000 and the recognition of a loss on derivatives of $35,244. During the nine months ended February 28, 2015, the Company recorded accretion of $6,189, increasing the carrying value of the note to $6,189.
And then there's this:
Upon the issuance of the convertible note payable described in Note 9(g), the Company concluded that it only has sufficient shares to satisfy the conversion of some, but not all, of the outstanding convertible notes, warrants and options. The Company elected to reclassify contracts from equity with the earliest inception date first. As a result none of the Company’s previously outstanding convertible instruments qualified for derivative reclassification, however, any convertible securities issued after the election would qualify for treatment as derivative liabilities.
And then this under the Loans Payable section of the latest 10Q:
On August 4, 2015, the Company borrowed $50,000 pursuant to a promissory note. The note was due on September 4, 2015. The note bears interest at 120% per annum prior September 4, 2015, and at 180% per annum after September 4, 2015. The holder of the note was also granted the rights to buy 100,000 shares of the Company’s common stock at a price of $0.15 per share until August 4, 2017. Subsequent to the August 31, 2015, the Company repaid $35,000 of the outstanding principal and the note is in default.
Yep. 120% and 180%.. Wonder who the lucky shark is.
I cant even make this stuff up.
Link: http://www.otcmarkets.com/edgar/GetFilingPdf?FilingID=10968633
GLTA & JMO
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