Notes to the Financial Statements
1. Nature of Operations and Continuance of Business
Net Savings Link, Inc. (“NSL”, “the Company”, or “Company”) formerly known as Calibert Explorations, Ltd. was incorporated under the laws of the State of Nevada on February 21, 2007. NSL was organized to explore mineral properties in Canada; however, the Company decided to change its business strategy during fiscal year 2010 and on November 11, 2010, changed its name to Net Savings Link, Inc from Calibert Explorations, Ltd. to reflect their business objectives of being an online provider of discount offers and savings opportunities to the mass consumer market. This was achieved by doing a reverse merger with “Net Savings Link, Inc”, and Calibert Explorations, Ltd being the surviving entity.
Going Concern
NSL’s financial statements are prepared using Generally Accepted Accounting Principles applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, NSL has generated minimal revenue and accumulated significant losses since inception. As of November 30, 2013, company has accumulated deficit of $4,370,509 and a working capital deficit of $556,177. All of these items raise substantial doubt about its ability to continue as a going concern. Management’s plans with respect to alleviating the adverse financial conditions that caused management to express substantial doubt about the NSL’s ability to continue as a going concern are as follows:
In order to fund the start-up of operations during the year ended November 30, 2012, NSL entered into several financing transactions and continues to try to raise funds in fiscal (see Note 4). The continuation of NSL as a going concern is dependent upon its ability to generating profitable operations that produce positive cash flows. If NSL is not successful, it may be forced to raise additional debt or equity financing.
There can be no assurance that NSL will be able to achieve its business plans, raise any more required capital or secure the financing necessary to achieve its current operating plan. The ability of NSL to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
2. Summary of Significant Accounting Policies
a. Basis of Presentation and Accounting Methods
The financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States using the accrual method of accounting. NSL’s fiscal year-end is November 30.
b. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. NSL regularly evaluates estimates and assumptions related to deferred income tax asset valuation allowances. NSL bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by NSL may differ materially and adversely from NSL’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
F-6
c. Reclassification
Certain prior year amounts have been reclassified to conform to the current year presentation.
d. Cash and Cash Equivalents
NSL considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. As of November 30, 2013 and 2012, NSL had no cash equivalents.
e. Intangible Assets
Acquired intangible assets other than goodwill are amortized over their useful lives unless the lives are determined to be indefinite. Acquired intangible assets are carried at cost, less accumulated amortization. For intangible assets purchased in a business combination or received in a non-monetary exchange, the estimated fair values of the assets received (or, for non-monetary exchanges, the estimated fair values of the assets transferred if more clearly evident) are used to establish the cost bases, except when neither of the values of the assets received or the assets transferred in non-monetary exchanges are determinable within reasonable limits. Valuation techniques consistent with the market approach, income approach and/or cost approach are used to measure fair value. Amortization of finite-lived intangible assets is computed over the useful lives of the respective assets.
f. Impairment of Intangible assets
Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We evaluate intangible assets to determine potential impairment by comparing the carrying amount to the undiscounted estimated future cash flows of the related assets.
g. Basic and Diluted Net Loss Per Share
NSL computes net loss per share in accordance with ASC 260,
Earnings Per Share,
which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. NSL had net losses as of November 30, 2013 and 2012, so the diluted EPS excluded all dilutive potential shares in the diluted EPS because there effect is anti-dilutive.
h. Financial Instruments
ASC 820,
Fair Value Measurements
(ASC 820) and ASC 825,
Financial Instruments
(ASC 825)
,
requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:
Level 1 -
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
F-7
Level 2 -
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3
- Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
NSL’s financial instruments consist principally of cash, accounts payable, and accrued liabilities. Pursuant to ASC 820 and 825, the fair value of cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.
The following table sets forth by level with the fair value hierarchy the Company’s financial assets and liabilities measured at fair value on November 30, 2013 and 2012:
November 30, 2013:
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
90,699
|
|
|
$
|
90,699
|
|
November 30, 2012:
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
54,062
|
|
|
$
|
54,062
|
|
i. Revenue Recognition
NSL recognizes revenue from the sale of discount offers and savings to consumers in accordance with ASC 605,
Revenue Recognition
. Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is provided, and collectability is assured. NSL’s contracts typically contain provisions for (1) sale of discount certificates (2) web-site design and (3) web-site maintenance. NSL considers the web-site design and web-site maintenance to be inconsequential and perfunctory to the total arrangement and therefore recognized revenue upon delivery of the discount certificates.
j. Recent Accounting Pronouncements
NSL has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
k. Income Taxes
The Company accounts for income taxes using the asset and liability approach. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized.
F-8
l. Accounting for Derivative Instruments
NSL accounts for derivative instruments in accordance with ASC Topic 815,
Derivatives and Hedging
and all derivative instruments are reflected as either assets or liabilities at fair value in the balance sheet.
NSL uses estimates of fair value to value its derivative instruments. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, NSL’s policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, where available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates and credit spreads (including for NSL’s liabilities), relying first on observable data from active markets. Additional adjustments may be made for factors including liquidity, credit, bid/offer spreads, etc., depending on current market conditions. Transaction costs are not included in the determination of fair value. When possible, NSL seeks to validate the model’s output to market transactions. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The values presented may not represent future fair values and may not be realizable. NSL categorizes its fair value estimates in accordance with ASC 820 based on the hierarchical framework associated with the three levels of price transparency utilized in measuring financial instruments at fair value as discussed above. As at November 30, 2013 and 2012, company had a $90,699 and $54,062 derivative liability, respectively.
m.
Share-Based Compensation
The Company accounts for share-based compensation to employees in accordance with Accounting Standards Codification subtopic 718-10, Stock Compensation (“ASC 718-10”) and share-based compensation to non-employees in accordance with ASC 505. These require the measurement and recognition of compensation expense for all share-based payment awards, including stock options based on the estimated fair values.
3. Related Party Transactions
As of November 30, 2013 and 2012, NSL owed $144,328 and $50,828 to the President and CEO of NSL for back due wages, respectively.
As of November 30, 2013 and 2012, NSL owed $173,427 and $77,427 to the Vice President and director of NSL for back due wages, respectively.
4. Convertible Promissory Notes Payable
During the year ended November 30, 2011, NSL issued four Unsecured Convertible Promissory Notes (the “2011 Convertible Promissory Notes”) to the same entity in increments of $100,000, $499,952, $249,980 and $100,000, or a total of $949,932. The 2011 Convertible Promissory Notes were unsecured, due two years from the date of issuance, accrued interest at 10% per annum and were convertible into shares of NSL’s common stock at any time at the option of the holder at fifty percent (50%) of the fair market value of one share of NSL’s common stock based on the lowest bid during the ten days prior to the conversion date.
During the year ended November 30, 2012, the holders of the 2011 Convertible Promissory Notes elected to convert all of the outstanding principal of $949,932 and interest of $31,032 on the Notes into 871,968 shares of common stock, or $1.05 per share. As the conversion price was greater than the contractually obligated conversion price of $0.45 per share, NSL recorded a gain on extinguishment of debt and an offsetting reduction in paid-in capital based on the difference of the contractually stated conversion shares required to be issued and the actual number of shares issued upon conversion at the conversion date fair market value of $0.12 per share, or $3,072,147.
F-9
During the year ended November 30, 2012, NSL issued four Unsecured Convertible Promissory Notes to Asher Enterprises, Inc., a Delaware corporation (“Asher”) (the “2012 Asher Convertible Promissory Notes”) in the amounts of $47,500, $37,500, $37,500 and $50,000, or a total of $172,500. The 2012 Asher Convertible Promissory Notes are unsecured, due approximately nine months from the dates of issuance, accrued interest at 8% per annum and are convertible, at the option of the holder, into shares of the Company’s common stock after 180 days from issuance at fifty eight percent (58%) of the fair market value of one share of NSL’s common stock based on the average of the three lowest bid prices of the Company’s common stock during the ten trading days prior to the conversion date.
During the year ended November 30, 2012, NSL issued two Unsecured Convertible Promissory Notes to Southridge Partners II, LP, a Delaware Limited Partnership (“Southridge”), a related party (the “2012 Southridge Convertible Promissory Notes”) in the amounts of $75,000 and $50,000, or a total of $125,000. The 2012 Southridge Convertible Promissory Notes are unsecured, due approximately three and nine months, respectively, from the dates of issuance, accrued interest at 8% per annum and are convertible, at the option of the holder, into shares of NSL’s common stock. The note in the amount of $75,000 is convertible into common shares at maturity and the note in the amount of $50,000 is convertible into common shares after 180 days from issuance at fifty five percent (55%) and seventy percent (70%), respectively, of the fair market value of one share of NSL’s common stock based on the average of the two lowest bid prices of NSL’s common stock during the five trading days prior to the conversion date. NSL paid $50,000 in legal fees associated with the funding of $75,000 convertible notes, these fees have been recorded as debt discount and have been amortized monthly through November 30, 2012.
During the year ended November 30, 2012, the holders of the 2012 Asher Convertible Promissory Notes and 2012 Southridge Convertible Promissory Notes elected to convert outstanding principal of $156,800 and interest of $6,467 into 13,475,799 shares of common stock, or $0.01 per share.
During the year ended November 30, 2013, the holders of the 2012 Asher Convertible Promissory Notes and 2012 Southridge Convertible Promissory Notes elected to convert outstanding principal of $131,300 and interest of $6,584 into 80,035,836 shares of common stock, or $0.0017 per share.
During the year ended November 30, 2013, NSL issued four Unsecured Convertible Promissory Notes (the “2013 Convertible Promissory Notes”) to the same entity in increments of $42,500, $10,900, $37,000 and $20,500, or a total of $110,900. The 2013 Convertible Promissory Notes were unsecured, due between eight and nine months from the date of issuance, accrue interest at 8% per annum and are convertible into shares of NSL’s common stock at any time at the option of the holder at discounts from market ranging from 35% and 41% of the fair market value of one share of NSL’s common stock based on the lowest bid during the ten days prior to the conversion date.
In addition to the $75,000 convertible note due to Southridge, NSL granted a stock warrant for 1,500,000 shares of its common stock with an exercise price of $0.05 per share on March 9, 2012. These warrants have a seven-year term and are fully vested on the grant date. On March 9, 2012, NSL determined the fair value of the warrants using the Black-Scholes pricing model for a total value of $86,100. The warrant has a relative fair market value of $19,405; this is accounted for as a discount on the convertible note. The discount was amortized over the life of loan (approx. 4 months) and was fully amortized as of November 30, 2013.
The fair value of the warrants was computed using the Black-Scholes pricing model with the following assumptions:
|
Expected Term
|
|
7 years
|
|
|
Expected volatility
|
|
|
434.78
|
%
|
|
Risk free interest rate
|
|
|
1.43
|
%
|
|
Expected dividend yield
|
|
|
0.00
|
%
|
The warrants weighted average remaining contractual life for warrants outstanding as of November 30, 2013 is approximately 5.3 years; the weighted average exercise price is $0.75. The intrinsic value of the warrants is $0.00.
F-10
Due to their being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options embedded in the Convertible Promissory Notes, the conversion options are deemed and classified as derivative liabilities and recorded at fair value.
A summary of changes in the above referenced convertible promissory notes payable for the year ended November 30, 2013 and 2012 is as follows:
|
Beginning balance at November 30, 2011
|
|
$
|
-
|
|
|
Issuance of notes payable
|
|
|
297,500
|
|
|
Less: debt discount from conversion options, warrants and fees
|
|
|
(286,671
|
)
|
|
Add: amortization of discount
|
|
|
278,552
|
|
|
Less: conversions to common stock
|
|
|
(156,800
|
)
|
|
Ending balance at November 30, 2012
|
|
$
|
132,581
|
|
|
|
|
|
|
|
|
Beginning balance at November 30, 2012
|
|
$
|
132,581
|
|
|
Issuance of notes payable
|
|
|
110,900
|
|
|
Less: debt discount from conversion options, warrants and fees
|
|
|
(103,400
|
)
|
|
Add: amortization of discount
|
|
|
106,912
|
|
|
Less: conversions to common stock
|
|
|
(131,300
|
)
|
|
Ending balance at November 30, 2013
|
|
$
|
115,693
|
|
5. Derivative Liabilities
NSL analyzed the conversion options embedded in the Convertible Promissory Notes for derivative accounting consideration under ASC 815,
Derivatives and Hedging
, and determined that the instruments embedded in the above referenced convertible promissory notes should be classified as liabilities and recorded at fair value due to their being no explicit limit to the number of shares to be delivered upon settlement of the conversion options. Additionally, the above referenced convertible promissory notes contain dilutive issuance clauses. Under these clauses, based on future issuances of NSL’s common stock or other convertible instruments, the conversion price of the above referenced convertible promissory notes can be adjusted downward. Because the number of shares to be issued upon settlement of the above referenced convertible promissory notes cannot be determined under this instrument, NSL cannot determine whether it will have sufficient authorized shares at a given date to settle any other future share instruments. The fair values of the instruments were determined using a Black-Scholes option-pricing model. Upon the issuance dates of the above referenced convertible promissory notes, $103,400 and $217,266 was recorded as debt discount and $94,210 and $44,356 was recorded as day one loss on derivative liability for the years ended November 30, 2013 and 2012, respectively.
During the year ended November 30, 2012, the company recorded $38,825 in derivative liability due to the warrants issued in connection with convertible promissory note.
During the year ended November 30, 2012, $156,800 of the 2012 Asher Convertible Promissory Notes and 2012 Southridge Convertible Promissory Notes were converted to common stock (see Note 5) and the related derivative liability was extinguished through a charge to paid-in capital. During the year ended November 30, 2012, NSL recognized a total gain on derivative liability of $11,686.
During the year ended November 30, 2013, $131,300 of the 2012 Asher Convertible Promissory Notes and 2012 Southridge Convertible Promissory Notes were converted to common stock (see Note 5) and the related derivative liability was extinguished through a charge to paid-in capital. During the year ended November 30, 2013, NSL recognized a total loss on derivative liability of $138,359.
NSL valued the 2012 conversion options derivatives using the Black-Scholes option-pricing model. Assumptions used include (1) risk-free interest rates between 0.07% to 0.73%, (2) lives of between 1.75 and 2.0 years, (3) expected volatility of between 628% to 688%, (4) zero expected dividends, (5) conversion prices as set forth in the Convertible Promissory notes, and (6) the common stock price of the underlying share on the valuation date.
F-11
NSL valued the 2013 conversion options derivatives using the Black-Scholes option-pricing model. Assumptions used include (1) risk-free interest rates between 0.04% to 0.11%, (2) lives of between 0.16 and 0.27 years, (3) expected volatility of between 11% to 227%, (4) zero expected dividends, (5) conversion prices as set forth in the Convertible Promissory notes, and (6) the common stock price of the underlying share on the valuation date.
The following table summarizes the derivative liabilities included in the balance sheet at November 30, 2013 and 2012:
|
Conversion option derivative liabilities November 30, 2011
|
|
$
|
-
|
|
|
Addition of new conversion option derivatives
|
|
|
261,619
|
|
|
Reclassification of derivative liability to additional paid-in capital due to notes
payable conversions
|
|
|
(190,340
|
)
|
|
Reclassification of warrant derivative liability from additional paid-in capital
|
|
|
38,825
|
|
|
Change in fair value
|
|
|
(56,042
|
)
|
|
Balance at November 30, 2012
|
|
$
|
54,062
|
|
|
|
|
|
|
|
|
Conversion option derivative liabilities November 30, 2012
|
|
$
|
54,062
|
|
|
Addition of new conversion option derivatives
|
|
|
103,400
|
|
|
Reclassification of derivative liability to additional paid-in capital due to notes
payable conversions
|
|
|
(205,122
|
)
|
|
Change in fair value
|
|
|
138,359
|
|
|
Balance at November 30, 2013
|
|
$
|
90,699
|
|
6. Property and Equipment
Property and equipment are carried at cost, less accumulated depreciation and includes expenditures that substantially increase the useful lives of existing assets. Maintenance and repairs are charged to current operations as incurred. Upon sale, retirement, or other disposition of these assets, the costs and related accumulated depreciation are removed from the respective accounts, and any gain or loss on the disposition is included in other income.
Depreciation expense is computed using the straight-line method over the following estimated useful lives:
|
Description
|
Useful Life
|
|
Computer equipment
|
5 years
|
|
Software
|
3 years
|
|
Furniture and fixtures
|
7 years
|
Depreciation expense for the years ended November 30, 2013 and 2012 was $12,557and $12,557, respectively.
7. Intangible Assets - Website Development Costs
NSL’s intangible website asset consist of licenses for the use of Internet domain names or Universal Resource Locators, capitalized website development costs, other information technology licenses and marketing and technology related intangibles. All such assets are capitalized at their original cost and amortized over their estimated useful of 5 years. The website was placed into service during July 2011.
During the fourth quarter of fiscal year 2013, NSL management performed an impairment review and determined that due to the lack of significant revenue generation and projected revenue generation, the website development costs should be fully impaired. As such, NSL recognized impairment expense of $45,175 during the year ended November 30, 2013.
Amortization expense for the years ended November 30, 2013 and 2012 was $11,785 and $15,713 respectively.
F-12
8. Income Taxes
NSL files income tax returns in the U.S. federal jurisdiction, and the state of Florida. NSL’s policy is to recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. Company’s income tax rate is 34% given there are no significant temporary or permanent differences between the financial statements and the income tax basis.
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
|
Deferred tax asset
|
|
$
|
622,268
|
|
|
|
491,907
|
|
|
Valuation allowance
|
|
|
(622,268
|
)
|
|
|
(491,907
|
)
|
|
Net deferred tax asset
|
|
$
|
-
|
|
|
$
|
-
|
|
NSL had net operating losses of approximately $1,829,000 that expire 20 years from when incurred. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.
9. Equity
Common Stock
On January 17, 2012, the Company issued 133,333 shares of common stock to a consulting company for public relations services valued at $66,000, or $0.495 per share.
On March 29, 2012, the Company issued 190,476 shares of common stock to a consultant for services valued at $108,571, or $0.57 per share.
On May 12, 2012, the Company issued 333,333 shares of common stock to a consultant for services valued at $110,000, or $0.33 per share.
On June 29, 2012, the Company issued 433,333 shares of common stock to a consultant for services valued at $130,000, or $0.3 per share.
On July 20, 2012, the Company issued 74,074 shares of common stock for debt valued at $10,000, or $0.14 per share.
On July 31, 2012, the Company issued 160,000 shares of common stock for debt valued at $12,000, or $0.075 per share.
On August 9, 2012, the Company issued 400,000 shares of common stock for debt valued at $15,000, or $0.038 per share.
On August 23, 2012, the Company issued 666,667 shares of common stock to a consultant for services valued at $32,000, or $0.048 per share.
On August 23, 2012, the Company issued 1,397,384 shares of common stock for debt valued at $27,668 or $0.0198 per share.
F-13
On August 27, 2012, the Company issued 551,111 shares of common stock for debt valued at $12,660, or $0.023 per share.
On September 24, 2012, the Company issued 571,429 shares of common stock for debt valued at $12,000, or $0.021 per share.
On September 27, 2012, the Company issued 1,746,844 shares of common stock for debt valued at $25,950 and accrued interest of $2,152, or $0.016 per share.
On October 8, 2012, the Company issued 694,064 shares of common stock for debt valued at $7,600, or $0.011 per share.
On October 23, 2012, the Company issued 875,000 shares of common stock for debt valued at $6,300, or $0.0072 per share.
On November 5, 2012, the Company issued 1,415,626 shares of common stock for debt valued at $6,950 and accrued interest of $643, or $0.0054 per share.
On November 6, 2012, the Company issued 876,190 shares of common stock for debt valued at $4,600, or $0.005 per share.
On November 12, 2012, the Company issued 873,563 shares of common stock for debt valued at $3,800, or $0.0044 per share.
On November 19, 2012, the Company issued 2,045,209 shares of common stock for debt valued at $9,050 and accrued interest of $230, or $0.0045 per share.
On November 27, 2012, the Company issued 1,795,305 shares of common stock for debt valued at $6,550 and accrued interest of $115, or $0.0037 per share.
During the year ended November 30, 2012, due to conversion of convertible notes payable into common stock, the company wrote-off $190,340 in derivative liability associated with these notes.
During the year ended November 30, 2012, the company recorded $38,825 in derivative liability due to the warrants issued in connection with convertible promissory note.
On December 12, 2012, the Company issued 2,648,430 shares of common stock for $3,585 of debt and $2,970 of accrued interest, or $0.0025 per share.
On January 7, 2013, the Company issued 712,644 shares of common stock for $3,100 of debt, or $0.0043 per share.
On January 10, 2013, the Company issued 1,540,231 shares of common stock for $5,200 of debt and $1,500 of accrued interest, or $0.0043 per share.
On January 13, 2013, the Company issued 2,820,075 shares of common stock for $11,315 of debt and $318 of accrued interest, or $0.0043 per share.
On January 15, 2013, the Company issued 1,586,207 shares of common stock for $6,900 of debt, or $0.0041 per share.
On January 16, 2013, the Company issued 3,590,249 shares of common stock for $16,225 of debt and $66 of accrued interest, or $0.0043 per share.
F-14
On January 29, 2013, the Company issued 3,592,881 shares of common stock for $11,725 of debt and $132 of accrued interest, or $0.0033 per share.
On January 30, 2013, the Company issued 1,565,218 shares of common stock for $5,400 of debt, or $0.0034 per share.
On February 13, 2013, the Company issued 2,928,740 shares of common stock for $7,150 of debt and $99 of accrued interest, or $0.0025 per share.
On February 20, 2013, the Company issued 1,568,628 shares of common stock for $4,000 of debt, or $0.0025 per share.
On March 20, 2013, the Company issued 2,549,027 shares of common stock for $6,500 of debt, or $0.0026 per share.
On April 2, 2013, the Company issued 2,500,000 shares of common stock for $4,500 of debt, or $0.0018 per share.
On April 22, 2013, the Company issued 2,777,778 shares of common stock for $5,000 of debt, or $0.0018 per share.
On June 13, 2013, the Company issued 2,909,090 shares of common stock for $1,700 of debt and $1,500 of accrued interest, or $0.0011 per share.
On June 21, 2013, the Company issued 2,933,333 shares of common stock for $4,000 of debt, or $0.0014 per share.
On July 8, 2013, the Company issued 3,000,000 shares of common stock for $3,600 of debt, or $0.0012 per share.
On July 22, 2013, the Company issued 2,916,667 shares of common stock for $3,500 of debt, or $0.0012 per share.
On July 31, 2013, the Company issued 3,440,860 shares of common stock for $3,200 of debt, or $0.0009 per share.
On August 7, 2013, the Company issued 2,977,528 shares of common stock for $2,650 of debt, or $0.0009 per share.
On August 16, 2013, the Company issued 3,500,000 shares of common stock for $2,450 of debt, or $0.0007 per share.
On September 10, 2013, the Company issued 3,456,790 shares of common stock for $2,800 of debt, or $0.00081 per share.
On September 25, 2013, the Company issued 3,500,000 shares of common stock for $2,450 of debt, or $0.0007 per share.
On September 30, 2013, the Company issued 3,500,000 shares of common stock for $2,450 of debt, or $0.0007 per share.
On October 7, 2013, the Company issued 3,448,276 shares of common stock for $2,000 of debt, or $0.0006 per share.
On October 21, 2013, the Company issued 4,714,286 shares of common stock for $3,300 of debt, or $0.0007 per share.
On November 6, 2013, the Company issued 4,691,358 shares of common stock for $3,800 of debt, or $0.0008 per share.
On November 21, 2013, the Company issued 4,667,540 shares of common stock for $2,800 of debt, or $0.0006 per share.
F-15
During the year ended November 30, 2013, due to conversion of convertible notes payable into common stock, the company wrote-off $205,122 in derivative liability associated with these notes.
Effective March 15, 2013, the Company executed at 15-for-1 reverse split of its common stock. The effect of the reverse split has been shown retrospectively for all references to issuances of common stock in the financial statements and these footnotes.
Series A Preferred Stock
During June 2012, NSL amended its articles of incorporation to include 100,000,000 shares of $0.0001 par value Series A Preferred Stock. The Series A Preferred Stock has no dividend rights and in the event of liquidation, holders of Series A Preferred Stock will be entitled to receive, before any payment or distribution on the common stock or any other class of stock junior to Series A Preferred Stock upon liquidation, a distribution per share in the amount of the liquidation preference, if any, fixed or determined in accordance with the terms of such preferred stock plus, if so provided in such terms, an amount per share equal to accumulated and unpaid dividends in respect of such preferred stock (whether or not earned or declared) to the date of such distribution. Neither the sale, lease, or exchange of all or substantially all of our property and assets, nor any consolidation or merger, shall be deemed to be a liquidation.
On June 19, 2012, the Company issued a total of 300,000 shares of preferred stock for past due wages valued at $500, or $0.0017 per share.
On August 30, 2012, the Company issued a total of 1,200,000 shares of preferred stock for past due wages valued at $2,000, or $0.0017 per share.
10. Subsequent Events
On December 11, 2013, the Company issued 4,695,652 shares of common stock for $2,160 of debt, or $0.00046 per share.
On December 17, 2013, the Company issued 4,696,970 shares of common stock for $1,550 of debt, or $0.00033 per share.
On December 23, 2013, the Company issued 4,696,970 shares of common stock for $1,550 of debt, or $0.00033 per share.
On December 30, 2013, the Company issued 4,696,970 shares of common stock for $1,550 of debt, or $0.00033 per share.
On January 15, 2014, the Company issued 3,809,091 shares of common stock for $2,190 of debt and $2,000 of accrued interest, or $0.00110 per share.
On January 23, 2014, the Company issued 4,693,878 shares of common stock for $2,300 of debt, or $0.00049 per share.
On January 28, 2014, the Company issued 4,693,878 shares of common stock for $2,300 of debt, or $0.00049 per share.
On February 20, 2014, the Company issued 4,689,655 shares of common stock for $1,360 of debt, or $0.00029 per share.
F-16