yes lets
At March 31, 2016, the Company had not yet achieved profitable operations, had an accumulated deficit of $2,242,924 and expects to incur further losses in the development of its business, all of which casts significant doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to raise additional funding to further develop operations and a sales and marketing program so as to grow revenue and attain profitability. Although the Company has been successful in the past in obtaining financing, there remains significant doubt that it will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to the Company. During the period approximately 43% of revenues were derived from one customer (2015 – 48%).
On October 16, 2015, the Company closed a financing transaction pursuant to Securities Purchase Agreements dated October 5, 2015 (the “Securities Purchase Agreements”) and Convertible Promissory Notes dated October 5, 2015 (the “Notes”), each entered into by the Company and two investors (the “Purchasers”). Pursuant to the Securities Purchase Agreements, as described below, the principal amount of the Notes is $612,250, and the purchase price of the Notes is $581,000. The terms of the Notes are as follows:
The Notes, dated October 5, 2015, (the “Issue Date”), earn interest at an annual rate equal to 10% and provide for a maturity date of October 5, 2016. The funding calls for $256,000 at the time of closing of the Securities Purchase Agreements and Notes, $50,000 upon the filing of a registration statement with the Securities and Exchange Commission (the “SEC”), $50,000 upon receipt of the first round of comments from the SEC regarding the registrations statement, $125,000 upon the effectiveness of the registration statement, and at the Company’s option, $100,000 thirty (30) days after the registration statement becomes effective. As part of the Securities Purchase Agreements, the Company entered into a Registration Rights Agreement (‘RRA”) with the Purchasers. Pursuant to the RRA, the Company shall use its best efforts to file a registration statement on Form S-1 (the “Registration Statement) with the SEC, registering the shares of common stock which may be issued to the Purchasers pursuant to the Securities Purchase Agreements. The Company must use its commercially reasonable efforts to cause the Registration Statement to be declared effective by the SEC. As at May 10, 2016 the registration was not yet effective.
Any amount of principal or interest not paid when due on the Notes will bear interest at an annual rate of 24% applied from the due date until the date of payment. The Notes carry an original issue discount (“OID”) of $28,750. The Company agrees to pay the Purchasers $8,500 to cover certain fees incurred in connection with the Securities Purchase Agreements and Notes. The amount for fees is included in the initial principal amount of the Notes and the original issue discount is applied pro rata in accordance with the funded tranches.
The notes are convertible at a conversion price equal to the lower of: 1) 60% multiplied by the lowest average trading price for the Company’s common stock during the twenty (20) day trading period ending on the latest complete trading day prior to the date of conversion; or 2) the closing price at October 5, 2015. While the Purchasers’ conversion rights exist, the Company will reserve a sufficient number of shares from its authorized and unissued shares of common stock to provide for the issuance of common stock upon the full conversion of the Notes. The Company does not currently have enough shares authorized to meet this requirement.
During the periods ended March 31, 2016 and 2015 the shareholders above charged interest of $2,588 (CDN$3,551) and $2,500 (CDN$3,101), respectively on these demand loans. No payments of interest have been made and the unpaid interest is included in the loan balances noted above.
As at March 31, 2016, due to related party included $58,817 (December 31, 2015 - $21,676) in unpaid fees and salaries due to officers and directors of the Company, including Tyler Pearson, CEO, Scott MacRae, Director and Andrew Hilton, CFO.
looks like all the operations here consist of selling shares and CDs
AI
