On October 24, 2012, the Company entered into a securities purchase agreement, providing for the sale of a 10% convertible note in the aggregate principal amount of $335,000, with an original issue discount of $35,000. Advances will be paid in amounts at the lender’s discretion. Upon execution of the securities purchase agreement, the Company received an advance of $50,000, with an original issued discount of $5,833. The note matures one (1) year from the effective date of each advance. If the advances are repaid within 90 days, the interest rate will be zero percent (0%), otherwise a one time interest rate of five percent (5%) will be applied to the principal sums outstanding. The note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of the lesser of $0.035 per share or seventy percent (70%) of the lowest trading price of the previous 25 trading days prior to conversion. On September 25, 2013, the Company received an additional advance of $25,000, with an original issue discount of $2,916. During the nine months ended September 30, 2013, the investor converted principal in the amount of $94,500, and recognized a gain of $21,120. The advances received after the execution of the note equal a total principal amount of $125,000, with an original issued discount of $14,584. As of September 30, 2013, the aggregate principal sum outstanding was $80,500, plus the original issued discount of $20,416 for a total of 100,916. The Company recorded debt discount of $138,845 related to the conversion feature of the note, along with derivative liabilities at inception. As of September 30, 2013, the debt discount was amortized, and recorded as interest expense in the amount of $81,391, resulting in a remaining net debt discount of $57,454 at September 30, 2013.
On November 13, 2012, the Company entered into a securities purchase agreement providing for the sale of a 10% convertible promissory note in the principal amount of up to $100,000. Upon execution of the note, the Company received an initial advance of $20,000. The advance amounts are at the lender’s discretion. The Company received additional advances for the sum of $80,000 on various dates]. As of September 30, 2013, the total aggregate principal amount outstanding was $100,000. The note is convertible into shares of common stock of the Company at a price equal to a variable conversion price equal to the lesser of $0.01 per share or fifty percent (50%) of the lowest trading price in the previous 25 trading days. The note matures one (1) year from the effective date of each advance with respect to each advance. The Company recorded debt discount of $100,000 related to the conversion feature of the notes, along with derivative liabilities at inception. As of September 30, 2013, the debt discount was amortized, and recorded as interest expense in the amount of $79,808, resulting in a remaining net debt discount of $20,192 at September 30, 2013.
On November 29, 2012, the Company entered into a securities purchase agreement providing for the sale of a 10% unsecured convertible note in the principal aggregate amount of up to $80,000, at which time an initial advance of $12,500 was received by the Company. The note is, payable in full on or before November 29, 2013 unless sooner converted into shares of the Company’s common stock. The holder converted the principal amount of the note of $12,500, plus accrued interest of $625 on May 31, 2013, into 3,088,235 shares of common stock at a price of $0.0043 per share. The note was measured at fair value using the Black-Scholes pricing model, and the Company recognized a gain on conversion of $293. The Company recorded debt discount of $12,500 related to the conversion feature of the note, along with derivative liabilities at inception. As of September 30, 2013, the remaining debt discount was amortized, and recorded as interest expense in the amount of $12,500, resulting in a remaining net debt discount of $0 at September 30, 2013.
