Its all in the Financials
If your refering to the massive debt they currently are under. here it is from the FINS
Total liabilities and stockholders' equity $ 3,003,807
Based on restricted stock awards granted to employees during the three months ended March 31, 2015 and 2014, the Company recorded $42,965 and $0, respectively, as compensation expense under FASB ASC 718 (they paid themselves 43 grand out of stock)
In April 2009, the Company acquired the assets of A.T. Reynolds and Sons, Inc. (“Reynolds”), operating as Leisure Time Spring Water (“Leisure”) in Kiamesha Lake, New York (See Note 12). In connection with the acquisition of these assets, the Company assumed a $1.9 million mortgage that was due a commercial bank (“Bank”) against a building and land, included as part of the total assets acquired from Reynolds. On April 3, 2009, the Company entered into a Mortgage Consolidation, Modification and Extension Agreement with the Bank. The Company was required to make interest payments only through April 3, 2011, at which time the entire principal balance was due the Bank. Monthly interest was based on 90-day Libor at 4.50%. The $1.9 million mortgage was personally guaranteed by the Company’s Chief Executive Officer. The balance due against this mortgage at December 31, 2012 was $1,943,426. The balance due the Bank on April 3, 2011 was not paid putting the Company in default under the terms of the original agreement. The Company entered into a Forbearance Agreement (“Agreement”) on May 31, 2011, and upon expiration of that Agreement, the Company entered into an extension to the Agreement on October 3, 2011, which extended the Agreement period until April 3, 2012. On April 3, 2012, the Agreement period was further extended until October 3, 2012. On October 3, 2012 the forbearance agreement expired and the company was in default of its mortgage obligation.
Under the terms of the May 31, 2011 Agreement, the Company was required to make monthly principal payments of $15,000 plus all accrued and unpaid interest on the debt obligation. The Company was also assessed a forbearance fee of $19,000, and it was required to provide evidence acceptable to the commercial bank that the Company and Sullivan County had agreed to a payment plan for real estate taxes that were in arrears as of the date of the Agreement. The interest rate based on 90-day Libor rate of 4.0% did not change as a result of the Forbearance Agreement. All loan documents and the Security Agreement remained in full force and effect in accordance with the original terms. Under the terms of the October 3, 2011 Agreement, the commercial bank waived the $15,000 monthly principal payments, but not the interest payments. An additional $19,000 forbearance fee was assessed. All other terms of the original note obligation and the May 31, 2011 Agreement remained in full force and effect. The interest rate based on 90-day Libor rate of 4.625% did not change as a result of this Forbearance Agreement. Under the terms of the April 3, 2012 Agreement, the commercial bank assessed an additional forbearance fee of $19,000, continued to waive the monthly $15,000 principal payment, but not the monthly interest payments. All other terms of the original note obligation and the May 31, 2011 Agreement remained in full force and effect. The 90-day Libor rate of 4.5% did not change as a result of this Forbearance Agreement. The company continued to accrue interest on this obligation until such time as a refinancing plan was finalized.
In August 2013 the Company successfully completed negotiations with its Bank to accept $625,000 in satisfaction of its obligations on the mortgage. The difference between the $1.9 mortgage obligation (plus interest) and the $625,000 accepted in satisfaction of the mortgage is shown on the statements of operations as an extraordinary gain from extinguishment of debt. Concurrently the Company secured a new $900,000 mortgage with a “Lender.” This new mortgage bears interest at 12% per annum and is due and payable on August 27, 2014. The new mortgage requires the Company to make monthly interest only payments of $9,000. Under the terms of the new mortgage, the Company has the option to extend the maturity date of the new mortgage for one year providing it pays the Lender a fee of $54,000. During August 2014, the Company elected to extend the mortgage six months until January 31, 2015 by paying $45,000. In January 2015, the Company elected to extend the mortgage an additional six months until July 31, 2015 by paying $27,000.
During May and June 2014, the Company entered into a series of unsecured convertible promissory note agreements ("Notes") with JSJ Investments, Inc. ("JSJ" or "holder"). The principal amount for these two Notes total $131,256 with interest from 12% to 15% per annum. The maturity dates are November 2014. There is a 150% cash redemption premium on the principal amount only, upon approval by JSJ. The Note is convertible into the Company’s common stock. The conversion amount is the Note principal plus default interest, if any. During November 2014, JSJ converted $55,000 of their notes into the Company’s common stock for 26,415,520 shares at an exercise price of $0.00225 per share. JSJ Investments, Inc. entered into a convertible promissory note with the Company dated May 25, 2014 (“JSJ Note”). During January and March 2015, JSJ converted their $76,256 of their notes (including accrued interest) into the Company’s common stock for 59,330.032 shares at exercise prices ranging from $.000733333 to $0.001118. The company also entered into another unsecured promissory note dated May 25, 2014 for $68,082 with interest at 12% per annum. This note for $68,082 was immediately converted into the Company’s stock for 10,621,266 shares at an exercise price of $0.00641 per share.
Note 9 – Short-Term Borrowings (continued)
On August 14, 2014, the Company entered into a “Revenue Based Factoring (RBF/ACH) Agreement” (“Agreement”) with Strategic Funding Source, Inc. (“SFS”), a New York based company. The Company, pursuant to the Agreement, sold future receipts, accounts, written contracts and other obligations to SFS (“receipts”). The sale price is $100,000.00. The company will make a total of approximately 189 daily loan payments of $740. SFS purchased a total of $140,000.00 in receipts. The purchase price was received by the Company on August 22, 2014. The Agreement has an indefinite term, lasting until the Company completes its obligations contained therein. SFS has a security interest in all accounts, chattel paper, equipment, general intangibles, instruments and inventory. Mrs. Francine Lavoie, sole member of the Board of Directors and Company CEO, has also personally guaranteed the Agreement.
On October 2, 2014, the Company entered into a convertible promissory note with LG Capital for $78,750 with interest at 8% per annum and matures on October 1, 2015. The Note is convertible into the Company’s common stock.
On October 14, 2014, the Company entered into a convertible promissory note with Typenex Co-Investment for $107,500 with interest at 10% per annum and matures on July 14, 2015. The Note is convertible into the Company’s common stock.
On October 15, 2014, the Company entered into a convertible promissory note with Auctus Private Equity for $75,000 with interest at 8% per annum and matures on July 15, 2015. The Note is convertible into the Company’s common stock.
On October 15, 2014, the Company entered into a convertible promissory note with Eastmore Capital for $75,000 with interest at 8% per annum and matures on July 15, 2015. The Note is convertible into the Company’s common stock.
On December 4, 2014, the Company entered into a Promissory Note with Quarter Spot, a Virginia based company. The Company, pursuant to the Agreement, sold future receipts, accounts, written contracts and other obligations to Quarter Spot. The sale price is $137,250. The company will make a total of approximately 257 daily loan payments of $673. SFS has a security interest in all accounts, chattel paper, equipment, general intangibles, instruments and inventory.
On February 18, 2015, the Company entered into a Promissory Note with Platinum Rapid Funding Group, a New York based company. The Company, pursuant to the Agreement, sold future receipts, accounts, written contracts and other obligations to Platinum Rapid Funding. The sale price is $100,000. The company will make a total of approximately 147 daily loan payments of $918. Platinum purchased a total of $135,000.00 in receipts. Platinum has a security interest in all accounts, chattel paper, equipment, general intangibles, instruments and inventory.
On February 23, 2015, the Company entered into a Promissory Note with World Global Financing, Inc., a Florida based company. The Company, pursuant to the Agreement, sold future receipts, accounts, written contracts and other obligations to World Global. The sale price is $130,000. The company will make a total of approximately 168 daily loan payments of $1,014. World Global purchased a total of $170,300 in receipts. World Global has a security interest in all accounts, chattel paper, equipment, general intangibles, instruments and inventory.
During June 2013, a third party loaned the Company $50,000 bearing interest at 6.8% and maturing May 2015 (as amended in November 2014).
Note 10 – Related Party
At March 31, 2015 and December 31, 2014, the Company owed a related party $0 and $0, respectively, for ongoing operating and purchase transactions with the related party company.
On July 31, 2014 the related party assigned $250,342 of the approximately $330,000 debt owed by Boreal to the company’s principal shareholder. This note bears interest at 5% and matures on December 31, 2014. The $250,342 owed to the principal shareholder (including accrued interest of $5,898) was paid in January 2015 to the principal shareholder by converting their loans into 180,032,305 shares of the Company’s common stock.
For the three months ended March 31, 2015 and 2014 the Company made purchases from the related party of $7,289 and $12,924 respectively and made sales to the related party of $0 and $0, respectively.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2015, the Company had an accumulated deficit since January 10, 2006 (the date of quasi reorganization) of $3,897,165. Liquid assets at March 31, 2015 consisted primarily of cash and cash equivalents of $125,842. Current liabilities of $2,343,075 exceeded current assets by $1,800,455. Historically, we have financed our business through cash generated from ongoing operations, proceeds from sale of common stock to third party investors, borrowings from financial institutions, advances received from related parties, and officers of the Company. The company is currently pursuing financing alternatives.
Cash decreased $61,547 to $125,842 at March 31, 2015, as compared to $187,389 at December 31, 2014, which results from the following:
In August 2013 the Company successfully completed negotiations with its Bank to accept $625,000 in satisfaction of its obligations on the mortgage. The difference between the $1.9 mortgage obligation (plus interest) and the $625,000 accepted in satisfaction of the mortgage is shown on the statements of operations as an extraordinary gain from extinguishment of debt. Concurrently the Company secured a new $900,000 mortgage with a “Lender.” This new mortgage bears interest at 12% per annum and is due and payable on August 27, 2014. The new mortgage requires the Company to make monthly interest only payments of $9,000. Under the terms of the new mortgage, the Company has the option to extend the maturity date of the new mortgage for one year providing it pays the Lender a fee of $54,000. . During August 2014, the Company elected to extend the mortgage six months until January 31, 2015 by paying $45,000. In January 2015, the Company elected to extend the mortgage an additional six months until July 31, 2015 by paying $27,000.
During May and June 2014, the Company entered into a series of unsecured convertible promissory note agreements ("Notes") with JSJ Investments, Inc. ("JSJ" or "holder"). The principal amount for these two Notes total $131,256 with interest from 12% to 15% per annum. The maturity dates are November 2014. There is a 150% cash redemption premium on the principal amount only, upon approval by JSJ. The Note is convertible into the Company’s common stock. The conversion amount is the Note principal plus default interest, if any. During November 2014, JSJ converted $55,000 of their notes into the Company’s common stock for 26,415,520 shares at an exercise price of $0.00225 per share. JSJ Investments, Inc. entered into a convertible promissory note with the Company dated May 25, 2014 (“JSJ Note”). During January and March 2015, JSJ converted their $76,256 of their notes (including accrued interest) into the Company’s common stock for 59,330.032 shares at exercise prices ranging from $.000733333 to $0.001118. The company also entered into another unsecured promissory note dated May 25, 2014 for $68,082 with interest at 12% per annum. This note for $68,082 was immediately converted into the Company’s stock for 10,621,266 shares at an exercise price of $0.00641 per share.
On August 14, 2014, the Company entered into a “Revenue Based Factoring (RBF/ACH) Agreement” (“Agreement”) with Strategic Funding Source, Inc. (“SFS”), a New York based company. The Company, pursuant to the Agreement, sold future receipts, accounts, written contracts and other obligations to SFS (“receipts”). The sale price is $100,000.00. The company will make a total of approximately 189 daily loan payments of $740. SFS purchased a total of $140,000.00 in receipts. The purchase price was received by the Company on August 22, 2014. The Agreement has an indefinite term, lasting until the Company completes its obligations contained therein. SFS has a security interest in all accounts, chattel paper, equipment, general intangibles, instruments and inventory. Mrs. Francine Lavoie, sole member of the Board of Directors and Company CEO, has also personally guaranteed the Agreement.
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