what? I have posted time and again why the decrease here. If anyone cares to read the filings they will see MILLIONS of floorless shares being issued by this joke. PAY ATTENTION SPECIFICALLY TO THE PRICES NEAR THE BOTTOM. ALL ARE SUB .0001. This is why it was zero before and why it will be zero again. It is a share issuing joke
$4200 in the bank and
here are all the floorless notes these fools are issuing:
Note 4: Notes Payable
AlumiFuel Power Corporation
At March 31, 2013 and 2012, the Company owed $174,252 and $186,050, respectively, to an unaffiliated trust at an interest rate of 8% and due on demand. During the three months ended March 31, 2013, the trust loaned the Company $49,600 and sold $18,400 in principal on these notes to an unaffiliated third party that converted that balance to common stock of the Company. Please see Note 9 Capital Stock below for further information on this transaction. During the three month period ended March 31, 2012, the trust made $200,250 in additional loans and sold $33,150 in principal on these notes to an unaffiliated third party that converted that balance to common stock of the Company. The Company made payments on these notes during the three month period ended March 31, 2013 totaling $6,100 in accrued interest. The Company made payments on these notes during the three month period ended March 31, 2012 totaling $2,633 in principal and $17 in accrued interest. There was $10,575 and $1,654 in accrued interest payable on these notes at March 31, 2013 and 2012, respectively.
At both March 31, 2013 and 2012, the Company owed $32,732 to an unaffiliated third party with interest payable at 8% and due on demand. There was $3,608 and $987 in accrued interest payable on these notes at March 31, 2013 and 2012, respectively.
At March 31, 2013 and 2012, the Company owed an unaffiliated third party $87,088 and $26,000, respectively. These notes are due on demand and carry an interest rate of 8%. There was a total of $118,351 due to this party at December 31, 2012. An additional $28,421 was loaned during the three month period ended March 31, 2013. In the quarter ended March 31, 2012, $85,683 of these notes was purchased by an unaffiliated third party. There was $4,668 and $571 in accrued interest payable at March 31, 2013 and 2012, respectively.
At March 31, 2013 and 2012, the Company owed an unaffiliated third party $113,000 and $13,000, respectively. These amounts include $100,000 and $13,000 loaned in the three month periods ended March 31, 2013 and 2012, respectively. An additional $13,500 was loaned during the quarter ended March 31, 2013 that was repaid during the same period. In addition, $13,400 that was loaned in 2012 was also repaid. These notes carry current interest rates of 8% per annum. As of March 31, 2013 and 2012, there was $9,209 and $343 in accrued interest payable on these notes.
As of both March 31, 2013 and 2012, we owed an unaffiliated third party $6,000 in a demand note with 8% interest. As of March 31, 2013 and 2012, there was $585 and $105 in accrued interest payable on this note3.
During the year ended December 31, 2010 a note payable in the amount of $30,000 was issued and repaid to an unaffiliated third party leaving an interest balance due of $57. This amount remained unpaid as of both March 31, 2013 and 2012.
AlumiFuel Power, Inc.
At March 31, 2012, API owed $60,000 in promissory notes payable to an unaffiliated third party in accounts receivable financing that were repaid later in 2012. There was $1,050 and $2,250 in accrued interest payable on these notes as of March 31, 2013 and 2012, respectively.
AlumiFuel Power International, Inc.
In February 2011, an unaffiliated third party loaned the Company $75,000. This note called for a payment of $50,000 in thirty days with a balance due no later than 90 days from its issuance and carries and interest rate of 12% per annum. The $50,000 was repaid during the quarter ended June 30, 2011. No further payments have been made on this note leaving a balance due at both March 31, 2013 and 2012 of $25,000 with interest payable of $6,526 (2013) and $3,526 (2012).
During the quarter ended March 31, 2012, $26,100 in accrued interest payable to an unaffiliated third party was converted to a convertible promissory note leaving an interest balance due of $5 at both March 31, 2013 and 2012.
During the quarter ended March 31, 2013, the Company was loaned a total of Euro 27,500 from unaffiliated third parties. This amount represented $35,310 as of March 31, 2013. These notes are due one year from issuance with an interest rate of 10% and may be converted to AFPI common stock after six months outstanding and if AFPI's common stock begins trading again. As of March 31, 2013, there was a total of $296 in interest payable on these notes
F-11
HPI Partners, LLC
In 2009, various notes issued by HPI were converted to equity by third parties. Following those conversions, $647 in interest remained due and payable, which was outstanding at both March 31, 2013 and 2012.
Total
Notes and interest payable to others consisted of the following at March 31, 2013:
2013 Notes payable, non-affiliates; interest at 8% and due on demand $ 424,870
Notes payable, non-affiliates; interest at 60% and due on demand —
Notes payable, non-affiliates; interest at 24% and due on demand —
Notes payable, non-affiliates; interest at 10% and due in March 2014 35,310
Notes payable, non-affiliates; interest at 12% and due on demand 25,000
Notes payable 485,180
Interest payable, non-affiliates 37,226
Total principal and interest payable, other $ 522,406
Certain of our demand promissory notes contain provisions for conversion to common stock at market price on the date of conversion.
AlumiFuel Power Corporation Convertible Promissory Notes
Convertible Notes and Debentures with Embedded Derivatives:
From time-to-time, we issue convertible promissory notes and debentures with conversion features that we have determined represent an embedded derivative as they are convertible into a variable number of shares upon conversion. Accordingly, these notes are not considered to be conventional debt under EITF 00-19 and the embedded conversion feature must be bifurcated from the debt host and accounted for as a derivative liability. The Company believes that the aforementioned embedded derivatives meet the criteria of ASC 815 (formerly SFAS 133 and EITF 00-19), and should be accounted for separately as derivatives with a corresponding value recorded as a liability. Accordingly, the fair value of these derivative instruments are recorded as a liability on the consolidated balance sheet with the corresponding amount recorded as a discount to the notes in the period in which they are issued. Such discount is capitalized and amortized over the life of the notes. The change in the fair value of the liability for derivative contracts is credited to other income (expense) in the consolidated statements of operations at the end of each quarter. The face amount of the corresponding notes are stripped of their conversion feature due to the accounting for the conversion feature as a derivative, which is recorded using the residual proceeds to the conversion option attributed to the debt.
F-12
2009/2010 Convertible Debentures
In September 2009 through January 2010 we issued $435,000 of 6% unsecured convertible debentures in transactions with private investors (the “Debentures”). We received net proceeds from the Debentures of $363,190 after debt issuance costs of $71,810 paid to the placement agent. Additionally, the placement agent received a one-time issuance of 4,500 shares of our $0.001 par value common stock valued at $117,000 or $26.00 per share, the market price for our common stock on the date of issuance.
Among other terms of the offering, the Debentures were originally due in January 2013, but have been extended to December 31, 2013 (the “Maturity Date”), unless prepayment of the Debentures is required in certain events, as called for in the agreements. The Debentures are convertible at a conversion price (the “Conversion Price”) for each share of common stock equal to 75% of the lowest closing bid price per share (as reported by Bloomberg, LP) of the Company’s common stock for the twenty (20) trading days immediately preceding the date of conversion. In addition, the Debentures provide for adjustments in the case of certain corporate actions.
Each Debenture bears interest, in arrears, at six percent (6%) per annum, payable (i) upon conversion, or (ii) on the Maturity Date, in cash or shares of our common stock at the Conversion Price with a default interest rate of eighteen percent (18%) per annum. The Company may redeem the Debentures for an amount now equal to 131%.
Further terms call for the Company to maintain sufficient authorized shares reserved for issuance under the agreement equal to 300% of the number of shares issuable upon conversion of the debentures. In addition, if the closing bid price of the Common Stock is below $0.05 on three (3) consecutive trading days, then the Company shall seek to implement a reverse stock split in a ratio of at least one-for-five. On March 10, 2010, the Company was notified by the placement agent that the closing bid price of the Common Stock was below $0.05 on three (3) consecutive trading days and made demand under the agreement that the Company seek shareholder approval for a reverse stock split. As of the filing of this report the Company has approved, but not completed, a reverse stock split.
The debt issuance costs of $188,810 are being amortized over the three year term of the Debentures or such shorter period as the debentures may be outstanding. Accordingly, as the debentures are converted to common stock, that amount of debt issuance costs attributable to the amounts converted will be accelerated and expensed as of the applicable conversion dates. As of December 31, 2012, $188,080 of these costs had been expensed as debt issuance costs.
The beneficial conversion feature (an embedded derivative) included in the Debentures resulted in an initial debt discount of $435,000 and an initial loss on the valuation of derivative liabilities of $71,190 for a derivative liability balance of $506,190 at issuance.
The fair value of the Debentures were calculated at issue date utilizing the following assumptions:
Issuance Date Fair Value Term Assumed Conversion Price Market Price on Grant Date Volatility Percentage Interest Rate 9/29/2009 $207,429 3 years $0.105 $0.13 195% 1.38% 10/15/2009 $117,800 3 years $0.075 $0.12 196% 1.38% 11/15/2009 $77,778 3 years $0.045 $0.09 193% 1.38% 12/15/2009 $15,200 3 years $0.038 $0.05 192% 1.13% 1/19/2010 $67,667 3 years $0.03 $0.04 195% 1.38% 1/28/2010 $20,317 3 years $0.04 $0.05 195% 1.38%
As of December 31, 2012, the total face value of the Debentures outstanding was $47,000 following conversions made prior to that date.
During the three months ended March 31, 2013, the debenture holders converted a total of $37,000 in face value of the debentures to 2,466,667 shares of our common stock, or $0.015 per share. As a result of these transactions, the Company recorded a decrease to the derivative liability of $49,333 and as of March 31, 2013, the total face value of the Debentures outstanding was $10,000.
At March 31, 2013 the Company revalued the derivative liability balance of the remaining outstanding Debentures. Therefore, for the period from their issuance to March 31, 2013, the Company has recorded an expense and decreased the previously recorded liabilities by $492,857 resulting in a derivative liability balance of $13,333 at March 31, 2013.
F-13
The fair value of the Debentures was calculated at March 31, 2013 utilizing the following assumptions:
Fair Value Term Assumed Conversion Price Volatility Percentage Interest Rate $13,333 3 years $0.000075 275% 0.38%
January 2012 Interest Note
In January 2012, we converted a total of $26,100 in interest payable on $75,000 in notes of the Company and AFPI to a unaffiliated note holder to a convertible note. This note is due in January 2013 and carries an interest rate of 8% per annum. The note is convertible into shares of our common stock at a 50% discount to the lowest three trading prices in the ten days prior to conversion.
The beneficial conversion feature (an embedded derivative) included in the January 2012 Interest Note resulted in an initial debt discount of $26,100 and an initial loss on the valuation of derivative liabilities of $11,186 for a derivative liability balance of $37,286 at issuance.
The fair value of the Converted AFPI Notes was calculated at issue date utilizing the following assumptions:
Issuance Date Fair Value Term Assumed Conversion Price Market Price on Grant Date Volatility Percentage Interest Rate 1/2/12 $37,286 12 months $0.0007 $0.0014 226% 0.11%
At March 31, 2013, the Company revalued the derivative liability balance of the remaining outstanding January 2012 Interest Note. As a result, for the period from their issuance to December 31, 2012, the Company has recorded an adjustment and increased the previously recorded liabilities by $14,914 resulting in a derivative liability balance of $52,200 at March 31, 2013.
The fair value of the convertible note was calculated at March 31, 2013 utilizing the following assumptions:
Fair Value Term Assumed Conversion Price Volatility Percentage Interest Rate $52,200 12 months $0.00005 304% 0.15%
September 2012 Convertible Note
In September 2012 we issued $35,000 of 6% unsecured convertible debenture with a private investor (the “Sept Debenture”).
Among other terms of the offering, the Sept Debenture is due in September 2015 (the “Maturity Date”), unless prepayment of the Sept Debenture is required in certain events, as called for in the agreements. The Sept Debenture is convertible at a conversion price (the “Conversion Price”) for each share of common stock equal to 50% of the lowest closing bid price per share (as reported by Bloomberg, LP) of the Company’s common stock for the twenty (20) trading days immediately preceding the date of conversion. In addition, the Sept Debenture provides for adjustments in the case of certain corporate actions.
The Sept Debenture bears interest, in arrears, at six percent (6%) per annum, payable (i) upon conversion, or (ii) on the Maturity Date, in cash or shares of our common stock at the Conversion Price with a default interest rate of eighteen percent (18%) per annum. The Company may redeem the Sept Debenture for an amount equal to 120% within 90 days of issuance, 130% between 91 and 120 days of issuance, and 140% if 121 days or more after issuance. Further terms call for the Company to maintain sufficient authorized shares reserved for issuance under the agreement equal to 300% of the number of shares issuable upon conversion of the Sept Debenture.
Debt issuance costs totaling $11,500 are being amortized over the three year term of the Sept Debenture or such shorter period as the Sept Debenture may be outstanding. Accordingly, as the Sept Debenture is converted to common stock, that amount of debt issuance costs attributable to the amounts converted will be accelerated and expensed as of the applicable conversion dates. As of March 31, 2013, $1,917 of these costs had been expensed as debt issuance costs.
The beneficial conversion feature (an embedded derivative) included in the Sept Debenture resulted in an initial debt discount of $35,000 and an initial loss on the valuation of derivative liabilities of $35,000 for a derivative liability balance of $70,000 at issuance.
F-14
The fair value of the Converted AFPI Notes was calculated at issue date utilizing the following assumptions:
Issuance Date Fair Value Term Assumed Conversion Price Market Price on Grant Date Volatility Percentage Interest Rate 9/27/12 $70,000 3 years $0.00005 $0.0002 271% 0.33%
At March 31, 2013, the Company revalued the derivative liability balance of the remaining outstanding January 2012 Interest Note. As a result, for the period from their issuance to March 31, 2013, the Company recorded no adjustment to the previously recorded liabilities resulting in a derivative liability balance of $70,000 at March 31, 2013.
The fair value of the convertible note was calculated at March 31, 2013 utilizing the following assumptions:
Fair Value Term Assumed Conversion Price Volatility Percentage Interest Rate $70,000 3 years $0.00005 275% 0.38%
2012 Convertible Notes
During the six month period ended June 30, 2012, the Company entered into four separate note agreements with an institutional investor for the issuance of a convertible promissory notes in the aggregate amount of $134,000 on the following dates and in the following amounts (together the "2012 Convertible Notes"):
Date of Issue Amount Due Date 1/24/12 $36,000 October 19, 2012 3/7/12 $33,000 December 5, 2012 4/12/12 $32,500 January 16, 2013 5/10/12 $32,500 February 13, 2013
Among other terms, the 2012 Convertible Notes are due on the dates above, unless prepayment is required in certain events, as called for in the agreements. The 2012 Convertible Notes are convertible at a conversion price (the “Conversion Price”) for each share of common stock equal to 50% of the average of the lowest three trading prices per share of the Company’s common stock for the ten (10) trading days immediately preceding the date of conversion. In addition, the 2012 Convertible Notes provide for adjustments for dividends payable other than in shares of common stock, for reclassification, exchange or substitution of the common stock for another security or securities of the Company or pursuant to a reorganization, merger, consolidation, or sale of assets, where there is a change in control of the Company.
The outstanding principal balance the 2012 Convertible Notes bear interest at eight percent (8%) per annum, payable in cash or shares of our common stock at the Conversion Price. Upon the occurrence of an Event of Default (as defined in the 2012 Convertible Notes), the Company is required to pay interest to the Holder of each outstanding note at twenty-two percent (22%) per annum and the Holder may at its option declare the 2012 Convertible Notes, together with all accrued and unpaid interest, to be immediately due and payable.
The Company is able at its option to prepay the 2012 Convertible Notes beginning ninety-one days following their issuance until 180 days following their issuance in an amount equal to 150% of the outstanding principal and interest. Further terms called for the Company to maintain sufficient authorized shares reserved for issuance under the 2012 Convertible Notes.
We received net proceeds from the 2012 Convertible Notes of $124,000 after debt issuance costs of $10,000 paid for lender legal fees. These debt issuance costs will be amortized over the terms of the 2012 Convertible Notes or such shorter period as the Notes may be outstanding. Accordingly, as the 2012 Convertible Notes are converted to common stock prior to their expiration date, that amount of debt issuance costs attributable to the amounts converted will be accelerated and expensed as of the applicable conversion dates. As of March 31, 2013, $9,723 of these costs had been expensed as debt issuance costs.
The beneficial conversion feature (an embedded derivative) included in the 2012 Convertible Notes resulted in total initial debt discounts of $134,000 and a total initial loss on the valuation of derivative liabilities of $96,167 for a derivative liability balance of $230,167 total for their issuances.
F-15
The fair value of the 2012 Convertible Notes was calculated at each issue date utilizing the following assumptions:
Issuance Date Fair Value Term Assumed Conversion Price Market Price on Grant Date Volatility Percentage Interest Rate 1/24/12 $60,000 9 months $0.0006 $0.0014 220% 0.09% 3/7/12 $66,000 9 months $0.0005 $0.0011 133% 0.14% 4/12/12 $66,667 9 months $0.00045 $0.0014 140% 0.17% 5/10/12 $37,500 9 months $0.0004 $0.0009 112% 0.17%
As of December 31, 2012, the total face value of the Debentures outstanding was $105,900 following issuance prior to that date.
During the three month period ended March 31, 2013, the debenture holders converted a total of $7,900 in principal and $1,400 in interest to 934,000 shares of our common stock, or $0.01 per share. As a result of these transactions, the Company recorded a decrease to the derivative liability of $15,800 and as of March 31, 2013, the total face value of the Debentures outstanding was $98,000.
At March 31, 2013, the Company revalued the derivative liability balance of the remaining outstanding 2011 Convertible Notes. As a result, for the period from their issuance to March 31, 2013, the Company has recorded an adjustment and increased the previously recorded liabilities by $52,000 resulting in a derivative liability balance of $186,000 at March 31, 2013.
The fair value of the Debentures was calculated at March 31, 2013 utilizing the following assumptions:
Fair Value Term Assumed Conversion Price Volatility Percentage Interest Rate $186,000 9 months $0.00005 294% 0.13%
October 2012 Convertible Notes
In October 2012 we issued $10,000 of 8% unsecured convertible debenture with a private investor at which time the investor also purchased $50,000 in existing notes from one of our third party note holders (together the “October Notes”).
Among other terms of the offering, the October Notes are due in October 2013 (the “Maturity Date”), unless prepayment is required in certain events, as called for in the agreements. The October Notes are convertible at a conversion price (the “Conversion Price”) for each share of common stock equal to 50% of the lowest closing price per share of the Company’s common stock for the thirty (30) trading days immediately preceding the date of conversion. In addition, the October Notes provides for adjustments in the case of certain corporate actions.
The October Notes bear interest at eight percent (8%) per annum, payable (i) upon conversion, or (ii) on the Maturity Date, in cash or shares of our common stock at the Conversion Price with a default interest rate of eighteen to twenty-two percent (18%-22%) per annum. The Company may redeem the October Notes for an amount equal to 140% within 180 days of issuance. Further terms call for the Company to maintain sufficient authorized shares reserved for issuance under the agreement equal to 300% of the number of shares issuable upon conversion of the October Notes.
Debt issuance costs totaling $1,000 are being amortized over the three year term of the October Notes or such shorter period as the October Notes may be outstanding. Accordingly, as the October Notes is converted to common stock, that amount of debt issuance costs attributable to the amounts converted will be accelerated and expensed as of the applicable conversion dates. As of December 31, 2012, $208 of these costs had been expensed as debt issuance costs.
The beneficial conversion feature (an embedded derivative) included in the October Notes resulted in an initial debt discount of $60,000 and an initial loss on the valuation of derivative liabilities of $60,000 for a derivative liability balance of $120,000 at issuance.
F-16
The fair value of the Converted AFPI Notes was calculated at issue date utilizing the following assumptions:
Issuance Date Fair Value Term Assumed Conversion Price Market Price on Grant Date Volatility Percentage Interest Rate
10/12/12 $50,000 1 year $0.00005 $0.0002 236% 0.18% 10/17/12 $10,000 1 year $0.00005 $0.0002 236% 0.18%
As of December 31, 2012, the total face value of the Debentures outstanding was $27,500 following conversions made prior to that date.
During the three month period ended March 31, 2013, the debenture holders converted a total of $17,500 in face value of the debentures plus $514 in interest to 1,804,194 shares of our common stock, or $0.01 per share. As a result of these transactions, the Company recorded a decrease to the derivative liability of $35,000 and as of December 31, 2012, the total face value of the Debentures outstanding was $10,000.
At March 31, 2013 the Company revalued the derivative liability balance of the remaining outstanding Debentures. Therefore, for the period from their issuance to March 31, 2013, the Company has recorded an expense and decreased the previously recorded liabilities by $0 resulting in a derivative liability balance of $20,000 at March 31, 2013.
The fair value of the Debentures was calculated at March 31, 2013 utilizing the following assumptions:
Fair Value Term Assumed Conversion Price Volatility Percentage Interest Rate $20,000 1 year $0.00005 304% 0.15%
February 2013 Notes
In February 2013, this investor purchased an additional note in the amount of $26,000 from one of our third party note holders (the "February 2013 Notes). The February 2013 Notes may be converted at any time at the lower of a discount to market of $50% of the lowest closing price per share of the Company’s common stock for the ten (10) trading days immediately preceding the date of conversion, or $0.00005, as adjusted for splits and other events. This note has an interest rate of 8% per annum and is due in January 2014.
The beneficial conversion feature (an embedded derivative) included in the February 2013 Notes resulted in an initial debt discount of $26,000 and an initial loss on the valuation of derivative liabilities of $26,000 for a derivative liability balance of $52,000 at issuance.
The fair value of the February 2013 Notes was calculated at issue date utilizing the following assumptions:
Issuance Date Fair Value Term Assumed Conversion Price Market Price on Grant Date Volatility Percentage Interest Rate
2/13/13 52,000 1 year $0.00005 $0.0001 296% 0.15%
During the three month period ended March 31, 2013, the note holders converted a total of $13,000 in face value of the debentures to 1,300,000 shares of our common stock, or $0.01 per share. As a result of these transactions, the Company recorded a decrease to the derivative liability of $26,000 and as of March 31, 2013, the total face value of the Debentures outstanding was $13,000.
The Company revalued the derivative liability balance of the remaining outstanding February 2013 Notes. Therefore, for the period from their issuance to March 31, 2013, the Company has recorded an expense and decreased the previously recorded liabilities by $26,000 resulting in a derivative liability balance of $26,000 at March 31, 2013.
F-17
The fair value of the Debentures was calculated at March 31, 2013 utilizing the following assumptions:
Fair Value Term Assumed Conversion Price Volatility Percentage Interest Rate $26,000 1 year $0.00005 304% 0.15%
October/November Convertible Notes
In October and November 2012 a private investor purchased a total of $139,600 in existing notes from one of our third party note holders (together the “October/November Notes”). The notes were amended to include a maturity date that is nine months from the amendment date or July/August 2013 and have an 8% interest rate.
The October/November Notes are convertible at a conversion price (the “Conversion Price”) for each share of common stock equal to 50% ($124,300) and 45% ($15,300) of the lowest closing bid price per share of the Company’s common stock for the ten (10) trading days immediately preceding the date of conversion.
The October/November Notes bear interest, in arrears, at eight percent (8%) per annum, payable (i) upon conversion, or (ii) on the Maturity Date, in cash or shares of our common stock at the Conversion Price.
The beneficial conversion feature (an embedded derivative) included in the October/November Notes resulted in an initial debt discount of $139,600 and an initial loss on the valuation of derivative liabilities of $143,000 for a derivative liability balance of $282,600 at issuance.
The fair value of the Converted AFPI Notes was calculated at issue date utilizing the following assumptions:
Issuance Date Fair Value Term Assumed Conversion Price Market Price on Grant Date Volatility Percentage Interest Rate
As of December 31, 2012 the total face value of the Debentures outstanding was $125,000.
During the quarter ended March 31, 2013, the debenture holders converted a total of $13,700 in face value of the debentures to 1,450,000 shares of our common stock, or $0.01 per share. As a result of these transactions, the Company recorded a decrease to the derivative liability of $29,000 and as of March 31, 2013, the total face value of the Debentures outstanding was $111,300.
At March 31, 2013, the Company revalued the derivative liability balance of the remaining outstanding Debentures. For the period from their issuance to March 31, 2013, there was a decrease of $60,000 to the previously recorded liabilities resulting in a derivative liability balance of $222,600 at March 31, 2013.
The fair value of the Debentures was calculated at March 31, 2013 utilizing the following assumptions:
Fair Value Term Assumed Conversion Price Volatility Percentage Interest Rate $222,600 9 months $0.00005 295% 0.13%
2013 Convertible Notes
In February and March 2013 a private investor purchased a total of $59,683 in existing notes from one of our third party note holders and loaned an additional $32,000 in new notes for a total of $91,683 (together the “2013 Convertible Notes”). The assumed note has an interest rate of 6% per annum. The new notes are due in December 2013 and have an 8% interest rate.
The 2013 Convertible Notes are convertible at a conversion price (the “Conversion Price”) for each share of common stock equal to 50% of the lowest closing bid price per share of the Company’s common stock for the ten (10) trading days immediately preceding the date of conversion.
The beneficial conversion feature (an embedded derivative) included in the 2013 Convertible Notes resulted in an initial debt discount of $32,000 and an initial loss on the valuation of derivative liabilities of $183,367 for a derivative liability balance of $183,367 at issuance.
The fair value of the Converted AFPI Notes was calculated at issue date utilizing the following assumptions:
Issuance Date Fair Value Term Assumed Conversion Price Market Price on Grant Date Volatility Percentage Interest Rate
At March 31, 2013, the Company revalued the derivative liability balance of the remaining outstanding Debentures. For the period from their issuance to March 31, 2013, there was no change to the previously recorded liabilities resulting in a derivative liability balance of $183,367 at March 31, 2013.
F-18
The fair value of the Debentures was calculated at March 31, 2013 utilizing the following assumptions:
Fair Value Term Assumed Conversion Price Volatility Percentage Interest Rate $183,367 9 months $0.00005 295% 0.13%
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