As of the latest quarterly report (June 30, 2012), these convertible notes have yet to be "baked" into the numbers that could affect PPS - some of these may in fact have already been converted, but this will give you a flavor:
As of June 30, 2012 the Company had outstanding $1,305,488 of convertible note principal. These convertible notes, along with related accrued interest, convert upon the Next Equity Financing or at the option of the note holder as follows:
$17,000 of convertible debt principal have interest at 5% and warrants equivalent to 20% of the principal balance, respectively, and convert upon the next equity financing.
$500,000 and $230,000 of convertible note principal and related accrued interest convert at two-thirds the price per share of the Next Equity Financing and the $500,000 of convertible note principal have warrants equivalent to 100% of the principal balance and the $230,000 of convertible note principal have no warrants attached. The maturity date for these are between 12/13/12 and 6/13/13. It should be noted that the financials state in the detail section regarding this financiing that these are convertible at one-third the price per share not two-thirds. If equity financing were to occur at today's price of approximately $0.006/share, then even at 2/3rd's the price, this would equate to a conversion of 182.5 million shares
$211,750 of convertible note principal having interest at 6%, can convert at prices ranging from $0.02 to $0.10 per share at anytime at the option of the note holder, and have no warrants. As of June 30, 2012, $83,750 of the principal of this $211,750 convertible debt has converted to common shares. This leaves $128,000 remaining that can be converted between $0.02 and $0.05 (2.56 - 6.4 million shares dilution upon conversion)
$90,000 of convertible note principal having interest at 6%, can convert at $0.10 or $0.20 per share at anytime at the option of the note holder and warrants equivalent to 100%. As of June 30, 2012, $57,000 of the principal of this $90,000 convertible debt has converted to common shares. This leaves a remainder of $33,000 which could be converted to 165,000 - 330,000 shares.
$244,988 of convertible note principal, having an interest rate of 8.5%. no warrants, can convert at $0.11 per share at anytime at the option of the note holder. This would equate to about 2.2 million shares. this note was convertible as early as January - it is my opinion that this one probably has already converted since June 30 and is baked into the numbers.
$91,500 of convertible note principal, having and interest rate of 8%, no warrants, can convert at 50-55% of the average of the two-three lowest trading days of the prior 10-60 trading days, there is a 180 day waiting period before the holder has the option to convert to common shares. This note matures for conversion between 10/27/12 and 3/15/13. At the current price of $0.006/share, this would equate to a convertion of approximately 30.5 million shares.
$9,500 of convertible note principle was issued as part of a unit debt instrument which consisted of a return on investment (“ROI”) agreement and a convertible promissory note in return for $10,000. The ROI has a redemption value of $10,500 due on demand and the convertible promissory note is for $9,500, non-interest bearing, due September 20, 2012, and is convertible to common shares after six months from the date of the note at a conversion price that is 50% of the lowest trading price over the 20 prior trading dates from the date of conversion notice. These shares may or may not have already been converted. However, at the current price this would equate to about 3.2 million shares.
$30,000 of convertible note principal, having interest of 12% per annum, compounded monthly, can convert any time at the option of the note holder, conversion at 55% of the lowest trading price over the prior three trading days from the date of conversion. At the current trading price, this would equate to about 9.1 million shares.
$21,500 of convertible note principal, having interest of 12% per annum, can convert anytime at the option of the note holder, can convert at 55% of the average of the three lowest trading prices over the prior ten trading days from the date of conversion. At the current price this would equate to about 6.5 million shares.
The common share effect of the warrants related to the following convertible debt has been included in the above schedule.
During the six months ended June 30, 2012 the Company issued $1,258,412 worth of common stock to various consultants for services and it paid $54,442 of trade accounts payable with shares of common stock in settlement of the trade debt.
There are 2.5 million shares of Preferred B convertible shares issued which have a conversion rate of 50:1 (125 million shares) and have a voting block equivalent of 125 million shares.
There are 250,000 shares of Preferred A convertible shares.
The Company states that the additional derivative liability on the above notes is $97.1k. There are 5.1 million stock options and warrants issued and available.
The Company has an additional $216k due various vendors that will be paid out of any future equity financing.
The Company is currently in default on a note for $1.175 million.
