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Replies to post #4145 on Velatel Global Comm. (fka VELA)
12/25/13 6:31 PM
12/25/13 8:00 PM
Convertible notes as of September 30, 2013 and December 31, 2012 are comprised of the following:
September 30, December 31,
2013 2012
10% Convertible Note Purchase Agreements (“Convertible Notes”) were due and payable December 31, 2008; accrued and unpaid interest was due at maturity; convertible note holder had the option to convert note principal together with accrued and unpaid interest to the Shares at a rate of $95.00 per Share. The Company is currently in default. $ 80,000 $ 80,000
10% Amended and Restated Convertible Note Purchase Agreements (“Amended Convertible Notes”) were due and payable December 31, 2009, with interest payable at maturity. The Amended Convertible Notes were convertible into Shares at the lesser of: (i) $0.95 per Share; or (ii) 80% of the volume weighted average of the closing bid price for the Shares on the Over The Counter Bulletin Board quotation system (“OTCBB”) for the ten day period prior to the convertible note holder’s election to convert. The Company is currently in default. 218,923 218,923
8% convertible note dated January 28, 2013. The note matures on January 23, 2014 and is convertible into shares of the Company's Series A common stock at a conversion price equal to 65% of the market value at the date of conversion. 8,000 –
12% convertible note dated June 26, 2013. The note matures on June 26, 2014 and is convertible into shares of the Company's Series A common stock at a conversion price equal to 70% of the market value at the date of conversion. 123,200 –
12% convertible note dated June 26, 2013. The note matures on December 26, 2013 and is convertible into shares of the Company's Series A common stock at a conversion price equal to 60% of the market value at the date of conversion. 25,000 –
12% convertible note dated July 5, 2013. The note matures on January 6, 2014 and is convertible into shares of the Company's Series A common stock at a conversion price equal to 60% of the market value at the date of conversion. 75,000 –
12% convertible note dated September 6, 2013. The note matures on March 6, 2014 and is convertible into shares of the Company's Series A common stock at a conversion price equal to 60% of the market value at the date of conversion. 50,000 –
12% convertible note dated September 6, 2013. The note matures on March 6, 2014 and is convertible into shares of the Company's Series A common stock at a conversion price equal to 60% of the market value at the date of conversion. 150,000 –
10% convertible note dated July 5, 2013. The note matures on April 1, 2014 and is convertible into shares of the Company's Series A common stock at a conversion price equal to 80% of the market value at the date of conversion. 81,000 –
Total 811,123 298,923
Less debt discounts (237,255 ) –
573,868 298,923
Less current maturities (573,868 ) (298,923 )
Long term portion $ – $ –
The convertible notes issued in 2013 converted into shares of the Company’s Series A Shares at a discount to the market price which gives rise to a beneficial conversion feature. The Company calculated the beneficial conversion feature to be $741,264 which has been recorded as a debt discount. The Company amortized $504,009 of this debt discount during the three months ended September 30, 2013.
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NOTE 7 NOTES PAYABLE
On August 16, 2013, the Company entered into a loan agreement (“AQT Loan Agreement”) with AQT, LLC (“AQT”) for repayment of $600,000 that AQT advanced to the Company on June 27, 2013 and paid directly to China Holdings as the principal only installment called for under the promissory note with the sellers of China Motion (transaction described in Note 18 – Acquisition). Under the AQT Loan Agreement, the Company agreed: (i) to repay $600,000, together with interest accruing at 5% per annum, on or before January 27, 2014; and (ii) to cause the Company’s subsidiary VelaTel Peru to transfer to Inversiones Balesia, S.A. (“IB”), an affiliate of AQT, 30 cellular towers designed, constructed and owed by VelaTel Peru (transaction described in Note 19 – Dispositions). The Company is entitled to repay $600,000 plus accrued interest in any combination of: (iii) cash; and/or (iv) transfer to AQT of shares of the capital stock of China Motion. One hundred percent of the stock of China Motion is valued for purposes of repayment at $6,437,100.
Notes payable at September 30, 2013 and December 31, 2012 were comprised of the following:
September 30, December 31,
2013 2012
Note payable, dated December 12, 2012; due June 12, 2013 unsecured and accrues interest at 8% per annum $ – $ 103,500
Note payable, due January 1, 2015, secured by equipment; interest at LIBOR (at rate of 0.3804% at September 30, 2013) plus 2.5% per annum with three semi-annual principal payments beginning January 1, 2014 5,501,870 5,501,870
Note payable, dated February 24, 2012 is unsecured, due on February 24, 2013 and accrues interest at 10% per annum, and is in default 669,211 684,210
Note payable, dated April 12, 2012 is unsecured, due on April 12, 2013 and accrues interest at 10% per annum, and is in default 15,789 38,653
Note payable, dated July 26, 2006 is due on October 1, 2016 and accrues interest at 8% per annum 50,921 63,782
Note payable, dated February 1, 2012 is due on March 1, 2015 and accrues interest at 8.7% per annum 71,138 106,662
Note payable, dated September 2, 2010 is secured by an automobile, due on August 15, 2015 and accrues interest at 10.45% per annum 5,335 7,229
Note payable, dated December 30, 2010 is secured by an automobile, due on February 1, 2014 and accrues interest at 8.8% per annum 6,981 20,031
Line of Credit Loan Agreement and Promissory Note (“First Note”), due December 31, 2011, and Second Note, all unsecured, interest at 10% per annum. During 2012, the First Note was split into 15 separate notes. As of December 31, 2012, two notes had been paid in full, two were partially paid, and the unpaid balance is in default. 4,116,055 5,999,558
Note payable issued in connection with acquisition of China Motion. The note calls for a final payment of $4,237,500 due on August 31, 2013, which is in default. 4,237,500 –
Note payable, dated June 24, 2013 and is due on January 27, 2014 and accrues interest at 5% per annum. 600,000 –
Total 15,274,800 12,525,495
Less current maturities (11,879,386 ) (9,075,373 )
Long term portion $ 3,395,414 $ 3,450,122
NOTE 8 NOTES PAYABLE, OTHER
During the year ended December 31, 2009, three judgments were entered against the Company relating to certain Convertible Notes currently in default. The judgments are accruing interest at rates between 3.6% and 10% per annum. The principal balance of the three judgments totaled $821,735 and $821,735 as of September 30, 2013 and December 31, 2012, respectively. The judgments are deemed current (as opposed to long-term) but are in default.
