Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

v2.4.0.8
Subsequent Events
9 Months Ended
Sep. 30, 2013
Notes to Financial Statements  
Note 10. Subsequent Events

On October 28, 2013, the Board of directors has signed a resolution to convert the balance of $63,097 owed to Mr. Simeo into 485,359 restricted shares of its common stock, par value $0.001, and the balance of $58,176 owed to Ms. Zhong into 447,505 shares of free trading common stock, par value $.001, calculated as the fair value of the average bid price of $0.13 for the last 30 days preceding the day of conversion.

 

On October 28, 2013, the Company issued a $16,000 8% convertible note with a term expiring on July 30, 2014 (the “Maturity Date”).  The principal amount of the note and interest is payable on the maturity date. The note is convertible into common stock beginning 180 days after the issuance date, at the holder’s option, at a 60% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion. The terms of the convertible note provide for certain redemption features which include features indexed to equity risks. In the event of default, the amount of principal and interest not paid when due bear interest at the rate of 22% per annum and the note becomes immediately due and payable.  The following table reflects the allocation of the purchase on the inception dates:

 

Convertible Note, Face Value   $ 16,000  
Convertible promissory note, Fair Value     44,410  
Day-one derivative loss     (28,410 )