• Filing Date: 2018-01-12
  • Form Type: 10-Q
  • Description: Quarterly report
v3.8.0.1
SUBSEQUENT EVENTS
9 Months Ended
Sep. 30, 2017
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 9 SUBSEQUENT EVENTS 

  

During December 2017, we sold a Convertible Promissory Note to More Capital, LLC (“More Capital”). The note had a purchase price of $25,000, a face amount of $32,200, an original issue discount of $4,200, a due date of June 13, 2018 and an interest rate of 10% per annum. We also agreed to pay $3,000 of More Capital’s expenses associated with the transaction. At any time 90 days after the issuance date the principal amount of the note can be converted into our common stock at the option of the holder, subject to a 4.99% beneficial ownership limitation, at a conversion price equal to 50% of the average of the three lowest quoted sales prices for our common stock on the 20 trading days prior to conversion, subject to an additional discount of 10% in the event our common stock is subject to a DTC chill. We can prepay the note subject to certain prepayment penalties. We also provided More Capital a right of first refusal to provide additional funding during the period the note is outstanding. The note is payable by way of daily withdrawals from our bank account in the amount of $134. We also agreed that if we provide any financing source more favorable term(s) than More Capital while the note is outstanding that the More Capital note would, at the option of More Capital, be amended to include such more favorable term(s). The note contains various penalties and liquidated damages upon the occurrence of an event of default.

 

During December 2017, we entered into a Securities Purchase Agreement and sold a 12% Convertible Redeemable Note in the amount of $58,200 to Adar Bays, LLC (“Adar Bays” and the “Adar Bays Note”). The amount owed under the Adar Bays Note is convertible into shares of our common stock at a conversion price equal to 58% of the lowest trading price of our common stock for the 20 trading days prior to conversion, accrues interest at 12% per annum until paid in full, included an original issue discount (OID) of $5,700 and has a due date of December 20, 2018. In the event restrictions are placed on our stock by the Depository Trust Company, the conversion rate would be adjusted to 48% of the lowest trading price of our common stock for the 20 trading days prior to conversion. The note also contains a prohibition on conversion if such conversion would result in Adar Bays holding more than 9.9% of our outstanding stock. The note also contains various penalties and liquidated damages upon the occurrence of an event of default. 

 

We also entered into a second 12% Convertible Redeemable Note with Adar Bay with substantially similar terms as the Adar Bays Note (the “2nd Adar Bays Note”), provided that instead of funding the 2nd Adar Bay Note in cash, in connection with our entry into the 2nd Adar Bay Note, Adar Bay provided us a Collateralized Secured Promissory Note in the amount of $52,500 which represented amounts owed under the note and which note is due December 20, 2018. The note accrues interest at the rate of 12% per annum until paid in full. Amounts due under the Collateralized Secured Promissory Note are offset against amounts due under the 2nd Adar Bays Note until paid in full. We can prepay the note subject to certain prepayment penalties. The note contains various penalties and liquidated damages upon the occurrence of an event of default.

 

During December 2017, we entered into a Securities Purchase Agreement with Carebourn Capital, L.P. (“Carebourn”) and sold Carebourn a 12% Convertible Note in the principal amount of $66,700 (the “Carebourn December 2017 Note”). As part of the purchase agreement, we provided Carebourn a right of first refusal to participate in future offerings for 12 months, subject to certain exceptions. We also paid $8,000 of Carebourn’s expenses associated with the offering. The Carebourn December 2017 Note is convertible into shares of our common stock at any time 90 days after the sale date at a conversion price equal to 58% of the lowest trading price of our common stock for the last 20 trading days prior to conversion (subject to reductions of up to an additional 15% in the conversion price percentage upon the occurrence of certain defaults under the note), accrues interest at 12% per annum, had an OID of $8,700 and a due date of December 18, 2018. We can prepay the note subject to certain prepayment penalties. The note contains various penalties and liquidated damages upon the occurrence of an event of default. The note is payable by way of daily withdrawals from our bank account in the amount of $278, which begin March 1, 2018. We also agreed that if we provide any financing source more favorable term(s) than the note while the note is outstanding that note would, at the option of Carebourn, be amended to include such more favorable term(s). We also provided Carebourn a right of first refusal to provide additional funding during the period the note is outstanding.

 

On December 21, 2017, we filed an Amendment with the Secretary of State of Nevada to increase our authorized number of shares of common stock to 5,000,000,000.

 

Effective on January 2, 2018, Thomas H. Witthuhn, a member of the Company’s Board of Directors and the Chief Operating Officer of the Company resigned as the Chief Operating Officer of the Company.