Notes to the Financial Statements
March 31, 2017
(Unaudited)
NOTE 1—ORGANIZATION AND DESCRIPTION OF BUSINESS
Organization
We were organized as a Nevada corporation on August 25, 1999. On August 15, 2014, we entered into an Agreement and Plan of Merger to combine our business and activities with CannaSys, Inc., a privately held Colorado corporation focused on providing services to the cannabis industry (“CannaSys-Colorado”), into a single entity (the “Merger”). CannaSys-Colorado was originally formed on October 4, 2013, as a limited liability company, and converted to a corporation on June 26, 2014. Under the terms of the merger agreement, our wholly owned subsidiary formed to effectuate the Merger was merged with and into CannaSys-Colorado, the surviving entity, which then became our wholly owned subsidiary.
Due to the CannaSys-Colorado shareholders controlling us after the Merger, CannaSys-Colorado was considered the accounting acquirer. The transaction was therefore recognized as a reverse acquisition of us by CannaSys-Colorado.
In connection with the closing of the Merger and after meeting the requirements of the Securities Exchange Act of 1934, as amended (“Exchange Act”), on November 12, 2014, we filed amended and restated articles of incorporation with the Nevada Secretary of State that: (i) changed our name to CannaSys, Inc.; (ii) increased our authorized capital stock to 80,000,000 shares, consisting of 75,000,000 shares of common stock and 5,000,000 shares of preferred stock; (iii) authorized 5,000,000 shares of preferred stock; and (iv) made other modernizing, nonmaterial changes to our articles of incorporation. Changing our corporate name to CannaSys, Inc. was a condition to the Merger transaction. The name change better reflects the nature of our principal business operations and it became effective in the OTC market on December 2, 2014, when FINRA announced the name change. We also received a new CUSIP number and our trading symbol was changed to “MJTK.”
On October 17, 2016, we completed a recapitalization of our company, consisting of a 20-to-one reverse split and an increase of authorized capitalization. Our amended and restated articles of incorporation authorize us to issue 2,500,000,000 shares of capital stock, consisting of 2,000,000,000 shares of common stock, par value $0.001, and 5,000,000 shares of preferred stock, par value $0.001. This recapitalization triggered the automatic conversion of 1,515,000 shares of Series A Preferred Stock to 75,750 shares of common stock.
Nature of Business
We provide technology services in the ancillary space of the cannabis industry. We do not produce, sell, or handle in any manner cannabis products. As the current cannabis industry grows and gains momentum around the country, technology needs for the industry have been largely underserved. Our focus on this niche element of the industry creates many efficient and profitable tools for both industry owners and consumers.
Since inception, we have developed, refined, and introduced branded products, membership loyalty programs, text-message-based platforms for customer engagement, and laboratory management systems into the cannabis industry. To support marketing and delivery of our principal products and to access other products and services, we are expanding a network of strategic alliances within the industry to build an array of product and service offerings and to increase use of our distribution channels. Most of our active strategic relationships were only recently initiated and are yet to generate revenue.
We seek funding to launch our integrated cannabis-industry product and service suite. Our primary business objectives are to generate stable revenues and cash flows through the development of vertically integrated distribution centers and to collect and monetize cannabis consumer data.
6
NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Unaudited Interim Financial Information
The accompanying unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). These financial statements should be read in conjunction with the audited financial statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2016. The results of the three months ended March 31, 2017, are not necessarily indicative of the results to be expected for the full year ending December 31, 2017.
Use of Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Fair Value of Financial Instruments
We follow Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 825-10-50-10,
Financial Instruments—Overall—Disclosure,
for disclosures about fair value of our financial instruments and ASC 820-10-35-37,
Fair Value Measurement—Overall—Subsequent Measure—Fair Value Hierarchy,
to measure the fair value of our financial instruments. ASC 820-10-35-37 establishes a U.S. GAAP framework for measuring fair value and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10-35-37 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by ASC 820-10-35-37 are described below:
Level 1:
|
|
Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
|
|
|
|
Level 2:
|
|
Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
|
|
|
|
Level 3:
|
|
Pricing inputs that are generally observable inputs and not corroborated by market data.
|
The carrying amount of our financial assets and liabilities, such as cash, prepaid expenses, and accrued expenses, approximate their fair value because of the short maturity of those instruments. Our notes payable approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to us for similar financial arrangements at March 31, 2017.
The following table presents assets and liabilities that are measured and recognized at fair value on a recurring basis:
Description
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Gains and (Losses)
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale securities
|
$
|
-
|
|
$
|
-
|
|
$
|
57,500
|
|
$
|
-
|
Total
|
$
|
-
|
|
$
|
-
|
|
$
|
57,500
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale securities
|
$
|
-
|
|
$
|
-
|
|
$
|
32,500
|
|
$
|
-
|
Total
|
$
|
-
|
|
$
|
-
|
|
$
|
32,500
|
|
$
|
-
|
7
Recently Issued Accounting Pronouncements
In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02—
Leases (Topic 842)
. The guidance in ASU 2016-02 supersedes the lease recognition requirements in ASC 840,
Leases (FAS 13)
. ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the effect this standard will have on our financial statements.
In June 2016, the FASB issued ASU 2016-15—
Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the FASB’s Emerging Issues Task Force)
. The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The ASU is effective for public companies for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including interim periods within those fiscal years. An entity that elects early adoption must adopt all of the amendments in the same period. The guidance requires application using a retrospective transition method. We are currently evaluating the effects, if any, that the adoption of this guidance will have on our cash flows.
We have implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.
NOTE 3—GOING CONCERN
As reflected in the accompanying financial statements, we have an accumulated deficit of $13,064,966 at March 31, 2017, had a net loss of $2,600,674, and used net cash of $273,159 in operating activities for three months ended March 31, 2017. These factors raise substantial doubt about our ability to continue as a going concern. The financial statements have been prepared assuming that we will continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.
While we are attempting to increase operations and revenues, our cash position may not be significant enough to support our daily operations. Management intends to raise additional funds by way of debt and equity financing. Management believes that the actions presently being taken to further implement our business plan and generate increased revenues provide the opportunity for us to continue as a going concern. While we believe in the viability of our strategy to generate increased revenues and in our ability to raise additional funds, there can be no assurances to that effect. Our ability to continue as a going concern is dependent upon our ability to further implement our business plan and generate increased revenues. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
NOTE 4—PROPERTY AND EQUIPMENT
Furniture, fixtures, and equipment, stated at cost, less accumulated depreciation consisted of the following at:
|
|
March 31,
2017
|
|
December 31, 2016
|
|
|
|
|
|
Furniture, fixtures, and equipment
|
|
$ -
|
|
$ 8,403
|
Less: accumulated depreciation
|
|
-
|
|
(4,637)
|
Loss on disposal
|
|
-
|
|
(3,766)
|
Fixed assets, net
|
|
$ -
|
|
$ -
|
During the year ended December 31, 2016, we disposed of $8,403 of office furniture we were no longer using, resulting in a loss on disposal of $3,766.
8
Depreciation Expense
Depreciation expense for the three months ended March 31, 2017 and 2016, was $0 and $706, respectively.
Software, stated at cost, less accumulated amortization consisted of the following at:
|
March 31,
2017
|
|
December 31, 2016
|
|
|
|
|
Software
|
$221,000
|
|
$ -
|
Less: accumulated amortization
|
(67,511)
|
|
-
|
Fixed assets, net
|
$153,489
|
|
$ -
|
Amortization Expense
Amortization expense for the software for three months ended March 31, 2017 and 2016, was $27,247 and $0, respectively.
NOTE 5
—
AVAILABLE-FOR-SALE SECURITIES
On December 10, 2015, we acquired a 1.083% interest in Duby, LLC for $32,500. Duby is a social media application focused on cannabis consumers. As part of the acquisition, Duby plans to assist in the promotion of our products and services on its platform. We purchased the interest in Duby as part of ongoing negotiations for the joint marketing and promotion of our respective products. The purchase is being accounted for according to ASC 320,
Debt and Equity Securities
, as available-for-sale securities and has been recorded at cost. As Duby is not a public company with active trading by which the investment could be valued at March 31, 2017, we performed an impairment analysis and determined that as of March 31, 2017, there had been no impairment to the value of the purchased interest in Duby based on subsequent financings undertaken by Duby with third parties that substantiated the reported valuation.
On February 12, 2017, we acquired 2,500,000 shares of stock in Alliance Financial Network, Inc. (“AFN”) for $25,000. The shares were purchased pursuant to a non-binding letter of intent in which we were to acquire 100% of the assets of AFN. That letter of intent was terminated on May 9, 2017. As AFN is not a public company with active trading by which the investment could be valued at March 31, 2017, we performed an impairment analysis and determined that as of March 31, 2017, there had been no impairment to the value of the purchased interest in AFN.
NOTE 6—ASSET PURCHASE
On August 10, 2016, we entered into an Asset Purchase Agreement and a General Assignment and Bill of Sale, with Beta Killers LLC, a Colorado limited liability company, whereby we acquired all of the assets comprising the current version of the Citizen Toke application, including all Intellectual Property (as defined in the agreement), code, and other intangibles and related documentation associated with Citizen Toke. The purchase price was 1,000,000 shares of common stock. The shares were valued at $0.22 per share, the closing price on the date of purchase, for a total purchase price of $221,000. The software is being amortized over its estimated useful life of three years.
NOTE 7—COMMITMENTS AND CONTINGENCIES
Operating Lease
We currently sublease office space in Denver, Colorado. We signed a month-to-month lease starting January 1, 2016. Current lease payments are based on number of desks being occupied not to exceed $1,500 per month. The sublease required a deposit of $1,500, which was paid on January 25, 2016.
NOTE 8—RELATED-PARTY TRANSACTIONS
Refer to Note 12 for warrants issued.
9
NOTE 9–NOTE PAYABLE
On April 27, 2016, we issued a promissory note for $27,000 to an investor in conjunction with assignment of his note dated June 26, 2015, to another investor. The note included a $25,000 cash payment and a $2,000 original issue discount. The note is unsecured, accrues interest at 1% per annum, and is due and payable on October 26, 2016. In connection with the execution of the promissory note, we also issued a warrant to purchase 5,000 shares of common stock (Note 12). On January 5, 2017, this note was assigned to and purchased by Microcap Equity Group LLC, which converted the debt in full in January.
NOTE 10–NOTE PAYABLE IN DEFAULT
On May 5, 2016, we issued to Blackbridge Capital, LLC, a Convertible Promissory Note in the principal amount of $50,000 (the “Amended Note”). The Amended Note amends and restates an unsecured promissory note of $50,000, dated June 26, 2015, in favor of Jeff Holmes (the “Original Note”), which Mr. Holmes assigned to Blackbridge as part of the transaction under an Assignment and Assumption Agreement. As consideration for Mr. Holmes’ assignment of the Original Note to Blackbridge, Blackbridge paid $48,000 to Mr. Holmes, retaining $2,000 for its legal fees. The Amended Note accrues interest at the rate of 1% per annum, is convertible into shares of common stock at a conversion price of 50% of the lowest trading price in the 20 trading days before the conversion date, and matured on October 27, 2016. During the year ended December 31, 2016, $45,500 of principal was converted to shares of common stock. As of March 31, 2017, there is $4,500 and $65 of principal and accrued interest due on this note, respectively. This note is currently in default.
NOTE 11—CONVERTIBLE NOTES PAYABLE
The following is a summary of outstanding convertible promissory notes as of December 31, 2016:
Note Holder
|
Issue Date
|
Maturity Date
|
Stated Interest Rate
|
Principal Balance Outstanding
|
|
|
|
|
|
|
|
EMA Financial, LLC
|
10/14/2015
|
10/14/2016
|
12%
|
$ -
|
(1)
|
Tangiers Investment Group, LLC
|
11/18/2015
|
11/19/2016
|
10%
|
2,216
|
(2)
|
Kodiak Capital Group, LLC
|
11/30/2015
|
12/01/2016
|
12%
|
44,687
|
(3)
|
Auctus Fund, LLC
|
12/03/2015
|
09/03/2016
|
10%
|
-
|
(4)
|
Kodiak Capital Group, LLC
|
12/15/2015
|
7/15/2016
|
0%
|
50,000
|
|
Adar Bays, LLC
|
12/16/2015
|
12/16/2016
|
8%
|
-
|
(5)
|
Colonial Stock Transfer
|
01/14/2016
|
01/14/2017
|
10%
|
7,507
|
(6)
|
Blackbridge Capital, LLC
|
04/27/2016
|
10/27/2016
|
1%
|
4,500
|
(7)
|
EMA Financial, LLC
|
05/05/2016
|
05/05/2017
|
12%
|
32,883
|
(8)
|
Black Forest Capital, LLC
|
05/31/2016
|
05/31/2017
|
8%
|
-
|
(9)
|
Black Forest Capital, LLC
|
05/31/2016
|
05/31/2017
|
2%
|
-
|
(10)
|
Adar Bays, LLC
|
07/12/2016
|
04/12/2017
|
8%
|
-
|
(11)
|
Auctus Fund, LLC
|
07/20/2016
|
04/20/2017
|
10%
|
45,750
|
|
Microcap Equity Group LLC
|
10/13/2016
|
10/13/2017
|
12%
|
-
|
(12)
|
Microcap Equity Group LLC
|
10/21/2016
|
10/21/2017
|
12%
|
7,400
|
|
Black Forest Capital, LLC
|
10/24/2016
|
04/24/2017
|
8%
|
78,600
|
(13)
|
Black Forest Capital, LLC
|
11/04/2016
|
11/04/2017
|
8%
|
27,500
|
|
Auctus Fund, LLC
|
12/07/2016
|
09/07/2017
|
12%
|
40,750
|
|
Adar Bays, LLC
|
12/12/2016
|
12/12/2017
|
8%
|
14,855
|
(14)
|
Black Forest Capital, LLC
|
12/14/2016
|
12/14/2017
|
8%
|
27,500
|
|
10
Note Holder
|
Issue Date
|
Maturity Date
|
Stated Interest Rate
|
Principal Balance Outstanding
|
|
|
|
|
|
|
|
Adar Bays, LLC
|
12/20/2016
|
12/12/2017
|
8%
|
57,500
|
|
|
|
|
|
$441,648
|
|
Less debt discount:
|
|
|
|
(87,908)
|
|
Convertible notes payable, net of discount:
|
|
|
|
$353,740
|
|
_______________
(1) Converted $33,300 of principal to common stock.
(2) Converted $57,784 of principal to common stock.
(3) Converted $5,313 of principal to common stock.
(4) Converted $49,250 of principal to common stock.
(5) Converted $35,000 of principal to common stock.
(6) Converted $2,400 of principal to common stock.
(7) Converted $45,500 of principal to common stock.
(8) Converted $20,617 of principal to common stock.
(9) Converted $30,000 of principal to common stock.
(10) Converted $50,000 of principal to common stock.
(11) Converted $35,000 of principal to common stock
(12) Converted $50,000 of principal to common stock
(13) Converted $48,900 of principal to common stock
(14) Converted $60,156 of principal to common stock
Accrued interest on the above notes was $23,700 as of December 31, 2016.
The following is a summary of outstanding convertible promissory notes as of March 31, 2017:
Note Holder
|
Issue Date
|
Maturity Date
|
Stated Interest Rate
|
Principal Balance Outstanding
|
|
|
|
|
|
|
|
Blackbridge Capital, LLC
|
04/27/2016
|
10/27/2016
|
1%
|
4,500
|
(1)
|
Microcap Equity Group LLC
|
10/21/2016
|
10/21/2017
|
12%
|
7,400
|
|
Black Forest Capital, LLC
|
11/04/2016
|
11/04/2017
|
8%
|
27,500
|
|
Black Forest Capital, LLC
|
12/14/2016
|
12/14/2017
|
8%
|
27,500
|
|
Adar Bays, LLC
|
12/20/2016
|
12/12/2017
|
8%
|
57,500
|
|
Microcap Equity Group LLC
|
01/10/2017
|
01/10/2018
|
12%
|
12,000
|
|
Black Forest Capital, LLC
|
01/23/2017
|
01/23/2018
|
8%
|
27,500
|
|
Black Forest Capital, LLC
|
02/15/2017
|
02/15/2018
|
8%
|
121,132
|
|
Black Forest Capital, LLC
|
03/10/2017
|
03/10/2018
|
8%
|
55,000
|
|
|
|
|
|
$ 340,032
|
|
Less debt discount:
|
|
|
|
(121,087)
|
|
Convertible notes payable, net of discount:
|
|
|
|
$ 218,945
|
|
_______________
(1) Converted $45,500 of principal to common stock.
Accrued interest on the above notes was $5,216 as of March 31, 2017.
Debt discount expense including original issue discounts for the three months ended March 31, 2017 and 2016, was $209,453 and $92,500, respectively.
Based on the fair value of the embedded conversion options on the day of issuance, a loss of $2,040,371 and $10,772 for the three months ended March 31, 2017 and 2016, respectively, was recorded in the statement of operations.
11
NOTE 12—STOCK WARRANTS
The warrants issued by us are classified as equity. The fair value of the warrants calculated at the time of grant was recorded as an increase to additional paid-in-capital.
On December 24, 2015, we issued a warrant to purchase 150,000 shares of common stock to our chief executive officer. As of December 31, 2015, the warrant had vested for 87,500 shares, with an aggregate fair value of $612,500. As of December 31, 2016, the warrant vested for another 50,000 shares, with an aggregate fair value of $350,000. The remaining warrants for 12,500 shares vested in the three months ended March 31, 2017, with an aggregate fair value of $87,500. The aggregate fair value is based on the Black-Scholes-Merton pricing model using the following estimates: exercise price of $1.00, stock price of $7.00, 1.33% risk free rate, 842% volatility, and expected life of the warrant of three years.
On December 24, 2015, we issued a warrant to purchase 25,000 shares of common stock to one of our directors. The aggregate fair value of the warrant totaled $175,000 based on the Black-Scholes-Merton pricing model using the following estimates: exercise price of $1.00, stock price of $7.00, 1.33% risk free rate, 842% volatility, and expected life of the warrant of three years.
On December 24, 2015, we issued a warrant to purchase 12,500 shares of common stock to one of our directors. The aggregate fair value of the warrant totaled $87,500 based on the Black-Scholes-Merton pricing model using the following estimates: exercise price of $1.00, stock price of $7.00, 1.33% risk free rate, 842% volatility, and expected life of the warrant of three years.
On December 24, 2015, we issued a warrant to purchase 7,500 shares of common stock to a former director. As of December 31, 2015, the warrant had vested for 1,875 shares. The aggregate fair value of the vested warrant totaled $13,125 based on the Black-Scholes-Merton pricing model using the following estimates: exercise price of $1.00, stock price of $7.00, 1.33% risk free rate, 842% volatility, and expected life of the warrant of three years. On March 22, 2016, we accepted the resignation of Mr. Wollins resulting in the cancellation of the warrant for the remaining 5,625 shares.
On January 21, 2016, we issued a warrant to purchase 15,625 shares of common stock to an investor. The aggregate fair value of the warrant totaled $71,875 based on the Black-Scholes-Merton pricing model using the following estimates: exercise price of $8.00, stock price of $4.60, 2.02% risk free rate, 600% volatility, and expected life of the warrant of 10 years.
On January 24, 2016, pursuant to the terms of a consulting agreement, we issued a warrant to purchase 5,000 shares of common stock to an investor, with an exercise price of $4.60 per share, that expires January 23, 2017. The aggregate fair value of the warrant totaled $28,967 based on the Black-Scholes-Merton pricing model using the following estimates: exercise price of $4.60, stock price of $5.80, 0.47% risk free rate, 638% volatility, and expected life of the warrant of one year.
On April 28, 2016, pursuant to the terms of a promissory note with an investor, we issued a warrant to purchase 5,000 shares of common stock. The aggregate fair value of the warrant totaled $27,000 based on the Black-Scholes-Merton pricing model using the following estimates: exercise price of $1.00, stock price of $5.40, 0.91% risk free rate, 1,177% volatility, and expected life of the warrant of 2.68 years.
12
A summary of the outstanding warrants as of December 31, 2016 and March 31, 2017, is as follows:
|
Shares Available to
Purchase with
Warrants
|
|
Weighted
Average
Price
|
|
Weighted
Average
Fair Value
|
|
|
|
|
|
|
Outstanding, December 31, 2016
|
215,000
|
|
$1.60
|
|
$6.80
|
|
|
|
|
|
|
Issued
|
-
|
|
-
|
|
-
|
Exercised
|
-
|
|
-
|
|
-
|
Cancelled
|
-
|
|
-
|
|
-
|
Expired
|
5,000
|
|
-
|
|
-
|
Outstanding, March 31, 2017
|
210,000
|
|
$1.60
|
|
$6.80
|
|
|
|
|
|
|
Exercisable, March 31, 2017
|
210,000
|
|
$1.60
|
|
$6.80
|
Range of
Exercise Prices
|
|
Number
Outstanding
3/31/2017
|
|
Weighted
Average Remaining
Contractual Life
|
|
Weighted Average
Exercise Price
|
|
|
|
|
|
|
|
$1.00 - $8.00
|
|
210,000
|
|
2.2 years
|
|
$1.80
|
NOTE 13—STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred Stock
On July 29, 2016, we filed an Amendment to the Articles of Incorporation Designating Rights, Privileges, and Preferences of Series A Preferred Stock with the Nevada Secretary of State respecting 1,515,000 shares of Series A Preferred Stock. The Series A Preferred Stock ranks equal to our common stock respecting the payment of dividends and distribution of assets upon liquidation, dissolution, or winding up. Each share is entitled to 50 votes, voting with the common stock as a single class.
No shares of preferred stock are issued and outstanding.
Common Stock
On February 2, 2017, we sold 36,000,000 shares of common stock to Kodiak Capital Group LLC for total cash proceeds of $148,680.
During the three months ended March 31, 2017, we issued 100,000 shares of common stock for services.
The shares were valued at the closing stock price on the date of grant, for a total noncash expense of $625.
13
The following table reflects the amounts of principal, interest, and fees converted, and the corresponding number of shares issued, in connection with outstanding convertible promissory notes during the three months ended March 31, 2017:
Date
|
Note Holder
|
Shares Issued
|
|
Amount
|
01/03/2017
|
EMA Financial LLC
|
17,400,000
|
|
$ 17,400.00
|
01/04/2017
|
EMA Financial LLC
|
19,200,000
|
|
19,200.00
|
01/05/2017
|
Adar Bays LLC
|
18,637,742
|
|
14,444.25
|
01/05/2017
|
Black Forest Capital LLC
|
10,000,000
|
|
7,750.00
|
01/06/2017
|
EMA Financial LLC
|
21,704,000
|
|
21,704.00
|
01/11/2017
|
Black Forest Capital LLC
|
15,000,000
|
|
11,625.00
|
01/13/2017
|
Black Forest Capital LLC
|
20,000,000
|
|
15,500.00
|
01/13/2017
|
EMA Financial LLC
|
24,556,110
|
|
24,556.11
|
01/13/2017
|
Microcap Equity Group LLC
|
22,851,306
|
|
17,138.48
|
01/17/2017
|
Black Forest Capital LLC
|
22,000,000
|
|
17,050.00
|
01/17/2017
|
Microcap Equity Group LLC
|
13,148,693
|
|
9861.52
|
01/17/2017
|
Tangiers Investment Group LLC
|
21,569,061
|
|
15,044.42
|
01/18/2017
|
Black Forest Capital LLC
|
22,500,000
|
|
17,437.50
|
01/18/2017
|
Kodiak Capital Group LLC
|
52,000,000
|
|
20,800.00
|
01/19/2017
|
Black Forest Capital LLC
|
11,939,846
|
|
9,253.38
|
01/19/2017
|
Kodiak Capital Group LLC
|
65,000,000
|
|
26,000.00
|
01/20/2017
|
Auctus Fund LLC
|
32,760,000
|
|
20,311.20
|
01/20/2017
|
Colonial Stock Transfer
|
13,289,051
|
|
8,970.11
|
01/24/2017
|
Kodiak Capital Group LLC
|
77,000,000
|
|
30,800.00
|
01/30/2017
|
Auctus Fund LLC
|
42,700,000
|
|
17,080.00
|
02/13/2017
|
Kodiak Capital Group LLC
|
24,716,275
|
|
9,886.51
|
02/13/2017
|
Kodiak Capital Group LLC
|
48,000,000
|
|
19,200.00
|
02/15/2017
|
Auctus Fund LLC
|
45,207,264
|
|
30,741
|
|
|
661,179,348
|
|
$401,753.48
|
NOTE 14—SUBSEQUENT EVENTS
In accordance with ASC 855-10,
Subsequent Events
¸ we have analyzed our operations subsequent to March 31, 2017, through the date the financial statements were available to be issued, and have determined that we do not have any material subsequent events to disclose in these financial statements other than the following.
On April 28, 2017, we received $25,000, net of original issue discount and fees of $3,875, from Black Forest Capital Group LLC pursuant to the terms of the Convertible Promissory Note dated February 15, 2017. The note bears interest at 8% per annum, is unsecured, and is due within one year.
Subsequent to March 31, 2017, we issued shares of common stock in conversion of principal and interest on our outstanding convertible notes as follows:
Date
|
Note Holder
|
Shares Issued
|
Amount
|
04/25/2017
|
Microcap Equity Group LLC
|
5,410,489
|
$ 7,845.21
|
05/04/2017
|
Black Forest Capital LLC
|
10,344,828
|
15,000.00
|
05/10/2017
|
Black Forest Capital LLC
|
16,666,667
|
12,500.00
|
14