2015 toxic debt and 68% P.A. equivalent interest loan
Total fees of $60k paid to receive $150k loan, with repayment to be made over 7 months with daily direct withdrawals from WSTI's bank account.
On October 1, 2015, the Company obtained cash under an installment loan agreement (the “Agreement”) with PowerUp Lending Limited, (“PowerUp”) in the principal amount of $195,000 for $150,000.
Under the terms of the Agreement, the Company will pay, via ACH Debit, a daily charge of $1,326.53 per day until the note for $195,000 is repaid. The Agreement states that there is no interest payable under the terms of the Agreement but the difference between the amount received, $150,000, and the principal amount of $195,000, will be recognized as interest expense over the life of the Agreement. The Agreement is unsecured and is based on future sales and collections on those sales.
The Company reimbursed Power Up for all costs and expenses incurred by it in connection with the transaction and paid $2,995 as an origination fee and paid $11,600 to Carter Terry & Company for due diligence fees.
Toxic Notes (2015 only)
LG Capital Financing – Note 1
On March 5, 2015, the Company entered into a securities purchase agreement with LG Capital Funding, LLC, an accredited investor (“LG”) whereby the Company issued and sold to LG an 8% convertible note (the “LG Note”) in the principal amount of $105,000 for $105,000.
The LG Note is due on the first anniversary of issuance and bears interest at the rate of 8% per annum. The LG Note is convertible, in whole or in part, into shares of Common Stock at the option of LG, at a conversion price equal to 60% of the lowest trading price of the Common Stock for the 15 trading days immediately preceding, and including, the date of conversion, subject to adjustment and further discount upon certain events, as set forth in the LG Note.
The Company has the right, at any time prior to the six month anniversary of the issuance date of the LG Note to redeem the outstanding LG Note at a redemption price equal to an amount between 115% and 145% of the amount of principal plus interest being redeemed, depending on the date of prepayment.
The convertibility of the LG Note may be limited if, upon conversion, the holder thereof or any of its affiliates would beneficially own more than 9.9% of Common Stock.
The Company reimbursed LG for all costs and expenses incurred by it in connection with the transactions in an amount equal to $5,000 and paid $8,000 to Carter Terry & Company for due diligence fees.
See Note 21 for conversions of outstanding debt subsequent to September 30, 2015.
JSJ Investments Financing – Note 1
On March 6, 2015, the Company issued and sold to JSJ Investments Inc. (“JSJ”) a convertible note (the “JSJ Note”) in the principal amount of $100,000, for $100,000.
The JSJ Note is due on demand and bears interest at the rate of 12% per annum. The JSJ Note is convertible, in whole or in part, into shares of Common Stock at the option of JSJ, at a conversion price equal to the lesser of (i) 55% of the lowest trading price of the Common Stock for the 20 trading days immediately preceding the date of issuance of the JSJ Note or (ii) 55% of the lowest trading price of the Common Stock for the 20 trading days immediately preceding the date of conversion subject to adjustment and further discount upon certain events, as set forth in the JSJ Note.
The Company has the right to redeem the outstanding JSJ Note at a redemption price equal to 150% of the amount of principal and interest being redeemed, provided that any repayment, including at maturity, can only be made with the consent of JSJ.
The Company reimbursed JSJ for all costs and expenses incurred by it in connection with the transactions in an amount equal to $2,000 and paid $10,000 to Carter Terry & Company in connection with due diligence fees.
Since the inception of Note #1, through September 30, 2015, JSJ converted approximately $59,515 of the outstanding balance of Note #1 into 27,125,836 shares of common stock at prices based on a formula which resulted in prices from $0.0013 to $0.0033.
See Note 21 for conversions of outstanding debt subsequent to September 30, 2015.
JMJ Financial Financing
On March 9, 2015, the Company issued and sold to JMJ Financial (“JMJ”) a convertible note (the “JMJ Note”) in the principal amount of $100,000 for $90,000. JMJ has the right to invest an additional $400,000 on the same terms and conditions from time to time at its sole discretion.
Each portion funded of the JMJ Note is due on the second anniversary of funding and bears no interest for the first three months and then a one-time interest charge of 12% will be due. The JMJ Note is convertible, in whole or in part, into shares of Common Stock at the option of JMJ at a conversion price equal to the lesser of (i) $0.084 or (ii) 60% of the lowest trading price of the Common Stock for the 25 trading days immediately preceding the date of conversion subject to adjustment and further discount upon certain events, as set forth in the JMJ Note.
The convertibility of the JMJ Note may be limited if, upon conversion, the holder thereof or any of its affiliates would beneficially own more than 4.99% of Common Stock.
The Company granted JMJ piggyback registration rights on the shares issuable upon conversion of the JMJ Note. If the Company fails to include such shares, the Company shall pay JMJ liquidated damages of 25% of the outstanding principal amount of the JMJ Note, but not less than $25,000.
Since the inception of the JMJ Note through September 30, 2015, JMJ converted approximately $23,040 of the outstanding balance of the JMJ Note into approximately 20,000,000 shares of common stock at prices based on a formula which resulted in prices from $0.0006 to $0.0036.
See Note 21 for conversions of outstanding debt subsequent to September 30, 2015.
On March 10, 2015, the Company entered into a securities purchase agreement with EMA Financial, LLC, an accredited investor (“EMA”) whereby the Company issued and sold to EMA an 8% convertible note (the “EMA Note”) in the principal amount of $100,000 for $90,000.
The EMA Note is due on the first anniversary of issuance and bears interest at the rate of 10% per annum. The EMA Note is convertible, in whole or in part, into shares of Common Stock at the option of EMA at a conversion price equal to 60% of the lowest trading price of the Common Stock for the 15 trading days immediately preceding the date of conversion subject to adjustment and further discount upon certain events, as set forth in the EMA Note.
The Company has the right, at any time prior to the four month anniversary of the issuance date of the EMA Note, upon at least five trading days prior written notice, to redeem the outstanding EMA Note at a redemption price equal to 135% of the amount of principal and interest being redeemed.
The convertibility of the EMA Note may be limited if, upon conversion, the holder thereof or any of its affiliates would beneficially own more than 4.9% of Common Stock.
The Company granted EMA a right of first refusal on all future financings for a year from the date of issuance of the EMA Note.
The Company reimbursed EMA for all costs and expenses incurred by it in connection with the transactions in an amount equal to $3,500.
Since the inception of the EMA Note through September 30, 2015, EMA converted approximately $27,932 of the outstanding balance of the EMA Note into 17,529,855 shares of common stock at prices based on a formula which resulted in prices from $0.00108 to $0.0027.
See Note 21 for conversions of outstanding debt subsequent to September 30, 2015.
Adar Bays Financing
On March 20, 2015, the Company entered into a securities purchase agreement with Adar Bays, LLC, an accredited investor (“Adar”) whereby the Company issued and sold to Adar an 8% convertible note (the “Adar Note”) in the principal amount of $50,000 for $50,000.
The Adar Note is due on the first anniversary of issuance and bears interest at the rate of 8% per annum. The Adar Note is convertible, in whole or in part, into shares of Common Stock at the option of Adar at a conversion price equal to 65% of the lowest trading price of the Common Stock for the 15 trading days immediately preceding and including the date of conversion, subject to adjustment and further discount upon certain events, as set forth in the Adar Note.
The Company has the right, at any time prior to the six month anniversary of the issuance date of the Adar Note to redeem the outstanding Adar Note at a redemption price equal to 150% of the amount of principal being redeemed plus interest.
The convertibility of the Adar Note may be limited if, upon conversion, the holder thereof or any of its affiliates would beneficially own more than 9.9% of Common Stock.
The Company reimbursed Adar for all costs and expenses incurred by it in connection with the transaction in an amount equal to $2,500 and paid $4,000 to Carter Terry & Company in connection with due diligence fees.
Union Capital Note
In April 2015, the Company entered into a securities purchase agreement with Union Capital, LLC, an accredited investor (“Union Capital”) whereby the Company issued and sold to Union Capital an 8% convertible note (the “Union Capital Note”) in the principal amount of $75,000 for $75,000.
The Union Capital Note is due on the first anniversary of issuance and bears interest at the rate of 8% per annum. The Union Capital Note is convertible, in whole or in part, into shares of Common Stock at the option of Union Capital, at a conversion price equal to 60% of the lowest trading price of the Common Stock for the 15 trading days immediately preceding, and including, the date of conversion, subject to adjustment and further discount upon certain events, as set forth in the Union Capital Note.
The Company reimbursed Union Capital for all costs and expenses incurred by it in connection with the transactions in an amount equal to $3,500 and paid $6,000 to Carter Terry & Company in connection with due diligence fees.
See Note 21 for conversions of outstanding debt subsequent to September 30, 2015.
JSJ Investments Financing – Note 2
On April 20, 2015, the Company issued and sold to JSJ Investments a convertible note (the “JSJ Note II”) in the principal amount of $112,000, for $112,000.
The JSJ Note II is due on demand and bears interest at the rate of 12% per annum. The JSJ Note II is convertible, in whole or in part, into shares of Common Stock at the option of JSJ, at a conversion price equal to the lesser of (i) 45% of the lowest trading price of the Common Stock for the 20 trading days immediately preceding the date of issuance of the JSJ Note II or (ii) 45% of the lowest trading price of the Common Stock for the 20 trading days immediately preceding the date of conversion subject to adjustment and further discount upon certain events, as set forth in the JSJ Note II.
The Company has the right to redeem the outstanding JSJ Note II at a redemption price equal to 135% to 145% of the amount of principal and interest being redeemed, provided that any repayment, including at maturity, can only be made with the consent of JSJ.
The Company reimbursed JSJ for all costs and expenses incurred by it in connection with the transactions in an amount equal to $2,000 and paid $8,000 to Carter Terry & Company in connection with due diligence fees.
Black Forest Capital LLC, Financing
On July 16, 2015, the Company issued and sold to Black Forest Capital LLC (“Black Forest”) a convertible note (the “Black Forest Note”) in the principal amount of $150,000 for $140,000.
The Black Forest Note is due on the first anniversary of funding and bears interest at a rate of 8%. The Black Forest Note is convertible, in whole or in part, into shares of Common Stock at the option of Black Forest at a conversion price equal to 60% of the lowest trading price of the Common Stock for the 20 trading days immediately preceding the date of conversion subject to adjustment and further discount upon certain events, as set forth in the Black Forest Note.
The Company has the right within 180 days of the date of the note to redeem the outstanding Black Forest Note at a redemption price equal to 130% of the amount of principal and interest being redeemed, provided that any repayment, including at maturity, can only be made with the consent of Black Forest.
The Company reimbursed Black Forest for all costs and expenses incurred by it in connection with the transactions in an amount equal to $12,000 and paid $12,000 to Carter Terry & Company in connection with due diligence fees.
GW Holdings Group LLC
On August 11, 2015, the Company issued and sold to GW Holdings Group, LLC. (“GW”) a convertible note (the “GW Note”) in the principal amount of $61,000 for $50,000.
The GW Note is due on the first anniversary of funding and bears interest at a rate of 8%. The GW Note is convertible, in whole or in part, into shares of Common Stock at the option of GW at a conversion price equal to 60% of the lowest trading price of the Common Stock for the 15 trading days immediately preceding the date of conversion subject to adjustment and further discount upon certain events, as set forth in the GW Note.
The Company has the right within 180 days of the date of the note to redeem the outstanding GW Note at a redemption price starting at 135% to 150% of the amount of principal and interest being redeemed, provided that any repayment, including at maturity, can only be made with the consent of GW.
The Company reimbursed GW for all costs and expenses incurred by it in connection with the transactions in an amount equal to $3,000 and paid $3,000 in connection with legal fees and an amount equal to $4,000 and paid $4,000 to Carter Terry & Company in connection with due diligence fees.
LG Capital Financing – Note 2
On August 14, 2015, the Company entered into a securities purchase agreement with LG whereby the Company issued and sold to LG an 8% convertible note (the “LG Note #2”) in the principal amount of $105,000 for $90,000.
The LG Note #2 is due on the first anniversary of issuance and bears interest at the rate of 8% per annum. The LG Note #2 is convertible, in whole or in part, into shares of Common Stock at the option of LG, at a conversion price equal to 60% of the lowest trading price of the Common Stock for the 15 trading days immediately preceding, and including, the date of conversion, subject to adjustment and further discount upon certain events, as set forth in the LG Note #2.
The Company has the right, at any time prior to the six month anniversary of the issuance date of the LG Note #2 to redeem the outstanding LG Note at a redemption price equal to an amount between 115% and 145% of the amount of principal plus interest being redeemed, depending on the date of prepayment.
The convertibility of the LG Note may be limited if, upon conversion, the holder thereof or any of its affiliates would beneficially own more than 9.9% of Common Stock.
The Company reimbursed LG for all costs and expenses incurred by it in connection with the transactions in an amount equal to $5,000 and paid $5,000 for legal fees and an amount equal to $10,000 paid $10,000 to Carter Terry & Company for due diligence fees.
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