NOTES
TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE
30, 2017
NOTE
1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature
of Business
On
August 9, 2010 the Company was incorporated as Nepia Inc. in the State of Nevada. From August 9, 2010 to July 18, 2013, the Company
was in the business of developing, manufacturing, and selling small boilers aimed at farmers primarily in Southeast Asia. Beginning
on July 19, 2013, the Company acquired bio-pharmaceutical intellectual property for the treatment of acute myeloid leukemia (AML)
and is entering into phase II human studies. The goal is to perfect this indication for marketing purposes for distribution
world-wide. On August 26, 2013, as a consequence of our new business direction, the Company changed its name to Rich Pharmaceuticals,
Inc. (“Rich” or “the Company”).
On
July 18, 2013, the Company designated, from our 10,000,000 authorized shares of preferred stock, par value $0.001, 6,000,000 shares
of Series “A” Preferred Stock. Our Series “A” Preferred Stock has voting rights of 100 votes per share
and votes with common shares as a single class.
On
July 18, 2013, the Company entered into an Asset Assignment Agreement (the “Assignment Agreement”) with Imagic, LLC
and its principals to acquire certain assets including a US Patent entitled “Phorbol esters as anti-neoplastic and white
blood cell elevating agents” and all related intellectual property associated with the patent. In consideration for the
intellectual property the Company issued 41,384 common shares, and 6,000,000 Series “A” Preferred shares. The common
and preferred shares were valued at $123,973. The Company further agreed to use its best efforts to complete a financing resulting
in proceeds of at least $2,000,000. If the Company was unable to raise $400,000 according to the terms of the Assignment Agreement,
the patent reverts back to Imagic, LLC and its principals. On January 17, 2014, the right of reversion was terminated in exchange
for a payment of $20,000.
On
July 19, 2013, the Company entered into an Agreement of Conveyance, Transfer and Assignment of Assets and Assumption of Obligations
(the “Sale Agreement”) with our prior officers and directors. Pursuant to the Sale Agreement, the Company transferred
all assets and business operations associated with our boiler business in exchange for assumption of all obligations associated
with that business and cancellation of loans amounting to $28,818. The cancellation of debt was recorded as additional paid-in
capital. In consequence to the Sale Agreement two former officers sold 265,646 common shares held by them to our new officer/director.
In turn, our new officer/director agreed to cancel 250,128 of those shares he received and returned them to treasury for retirement.
Certain other shareholders also agreed to cancel 131,261 common shares. (All shares stated at post-split amounts.)
On
September 5, 2013, the Company increased the authorized common shares, par value $0.0010, from 900,000 shares to 375,030,000 shares.
Correspondingly, the Company affirmed a forward split of 4.167 for 1 in which each shareholder was issued 4.167 common shares
for each share held. All share and per share date included in these financial statements has been retrospectively adjusted to
account for the stock split.
Effective
February 11, 2016, the Company approved a reverse stock split of the common stock, par value $0.001 per share at a ratio of 1
for 100 of each share issued and outstanding on the effective date. These financial statements retroactively reflect the reverse
stock split for all periods.
Effective
June 7, 2017, the Company approved a reverse stock split of the common stock, par value $0.001 per share at a ratio of 1 for 20
of each share issued and outstanding on the effective date. These financial statements retroactively reflect the reverse stock
split for all periods.
RICH
PHARMACEUTICALS, INC.
NOTES
TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE
30, 2017
NOTE
1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Cash
and Cash Equivalents
The
Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. At June 30, 2017
and March 31, 2017 the Company had $3,698 and $40,903, respectively, of unrestricted cash.
Basis
of Presentation
The
financial statements of the Company have been prepared using the accrual basis of accounting in accordance with generally accepted
accounting principles in the United States of America and are presented in U.S. dollars. The Company has adopted a March 31 fiscal
year end.
Certain
information and note disclosures normally included in our annual financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with
a reading of the financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March
31, 2017, as filed with the U.S. Securities and Exchange Commission.
Property
and Equipment
Property
and equipment is recorded at cost and is depreciated using the straight-line method over the estimated useful lives of the related
assets. The useful lives of the assets are as follows: Computer equipment, 3 years.
Long-Lived
and Intangible Assets
The
Company accounts for long-lived and intangible assets in accordance with ASC Topic 360-10-05, “Accounting for the Impairment
or Disposal of Long-Lived Assets.” ASC Topic 360-10-05 requires that long-lived assets be reviewed for impairment whenever
events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate.
The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result
from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an
impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value.
Fair
Value of Financial Instruments
The
Company’s financial instruments consist of cash and cash equivalents, prepaid expenses, accounts payable, accrued expenses,
amounts due to related parties, stock deposits, and a convertible note payable. The carrying amount of these financial instruments
approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise
disclosed in these financial statements.
Fair
value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs
used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring
that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing
the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs
are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or
liability. The guidance establishes three levels of inputs that may be used to measure fair value:
RICH
PHARMACEUTICALS, INC.
NOTES
TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE
30, 2017
NOTE
1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Fair
Value of Financial Instruments (continued)
Level
1 – Observable inputs such as quoted prices in active markets;
Level
2 – Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly;
Level
3 – Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own
assumptions.
The
Company did not have any level 1 or level 3 financial instruments at June 30, 2017 or March 31, 2017. As of June 30, 2017, the
derivative liabilities were considered a level 2 item; see Note 8.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
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 revenue and expenses
during the reporting period. Actual results could differ from those estimates.
Income
Taxes
Income
taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and
liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and
are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax
assets that, based on available evidence, are not expected to be realized.
Revenue
Recognition
The
Company will recognize revenue when products are fully delivered or services have been provided and collection is reasonably assured.
Research
and Development
The
Company will charge research and development costs to expense when incurred. The research and development costs include payments
made to unrelated third party vendors for their work on enhancements to existing technology, or research into new potentially
patentable products or processes.
Stock-Based
Compensation
Stock-based
compensation is accounted for at fair value in accordance with ASC Topic 718. On September 6, 2013, the Company approved the adoption
of Rich Pharmaceuticals, Inc. 2013 Stock Option/Stock Issuance Plan (the "2013 Plan”). The 2013 Plan is intended to
aid in recruiting and retaining key employees, directors or consultants and to motivate them by providing incentives through the
granting of awards of stock options or other stock based awards. The 2013 Plan is administered by the board of directors. Directors,
officers, employees and consultants and our affiliates are eligible to participate under the 2013 Plan. A total of 195,002 common
shares have been reserved for awards under the 2013 Plan. During the year ended March 31, 2015, the Company granted 9,875 stock
options to officers, directors, employees and consultants. During the period ended March 31, 2016, the Company granted 195,000
stock options to officers, directors, employees and consultants. During the period ended March 31, 2017, the Company granted 29,000,000
stock options to officers, directors, employees and consultants. The Company made the following modifications to the exercise
prices of its options: January 12, 2015, the Company modified the exercise price on all outstanding stock options to $3.40; April
6, 2015, the Company modified the exercise price on all outstanding stock options to $1.60 per share; August 4, 2015, the Company
modified the exercise price on all outstanding stock options to $0.20 per share. (All shares are stated at post-split amounts).
RICH
PHARMACEUTICALS, INC.
NOTES
TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE
30, 2017
NOTE
1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Basic
Loss Per Share
The basic earnings
(loss) per share is calculated by dividing the Company’s net income available to common shareholders by the weighted average
number of common shares during the year. The diluted earnings (loss) per share is calculated by dividing the Company’s net
income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The
diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first of the year
for any potentially dilutive debt or equity. Total potential dilutive instruments are 6.8 billion common shares upon conversion
of existing convertible debt instruments, 9,446,533 common stock warrants, and 29,195,000 common shares upon exercise of outstanding
options. In periods of net losses the dilutive loss per share is the same as the basic loss per share because the effect of the
dilutive shares in periods of loss is antidilutive.
Recent
Accounting Pronouncements
The
Company does not expect the adoption of any other recently issued accounting pronouncements to have a significant impact on the
Company’s results of operations, financial position or cash flow.
NOTE
2 – PROPERTY AND EQUIPMENT
Property
and equipment, recorded at cost, consisted of the following as of March 31, 2017 and 2016:
|
June 30, 2017
|
|
March 31, 2017
|
Computer equipment & furniture
|
$
|
5,160
|
|
|
$
|
5,160
|
|
Less: accumulated depreciation
|
|
(3,309
|
)
|
|
|
(3,035
|
)
|
Property and equipment, net
|
$
|
1,851
|
|
|
$
|
2,125
|
|
The
useful life of the computer equipment and furniture is 3 years.
Depreciation
expense was $274 and $1,606 for the periods ended June 30, 2017 and March 31, 2017, respectively.
NOTE
3 – INTANGIBLE ASSETS
On
July 18, 2013, the Company entered into an Asset Assignment Agreement (the “Assignment Agreement”) with Imagic, LLC
and its principals to acquire certain assets including a US Patent entitled “Phorbol esters as anti-neoplastic and white
blood cell elevating agents” and all related intellectual property associated with the patent. In consideration for the
intellectual property the Company issued 41,384 common shares and 6,000,000 Series “A” Preferred Stock. These shares
were valued at a total of $123,973. The Company has also paid additional funds to third parties to further the development of
this asset and terminate the right of reversion totaling $45,000. The Company analyzed the assets at March 31, 2014 and determined
that the value could not be supported and impaired the assets to $0.
On
October 6, 2014, the Company entered into an Asset Assignment Agreement (the “Assignment Agreement”) with Imagic,
LLC and its principals to acquire certain assets including a US Patent entitled “Compositions and methods of use of Phorbol
Esters for the treatment of Hodgkin’s Lymphoma”, and all related intellectual property, inventions and trade secrets,
data and clinical study results. In consideration for the intellectual property the Company issued 110,396 common shares. These
shares were valued at a total of $7,904,355; however, since the asset was acquired from a related party the Company valued the
asset at the cost of the asset to the related party, $82,120, and treated the excess value as a deemed dividend reducing additional
paid in capital. The Company analyzed the assets at March 31, 2015 and determined that the value could not be supported and impaired
the assets to $0.
RICH
PHARMACEUTICALS, INC.
NOTES
TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE
30, 2017
NOTE
4 – ACCRUED EXPENSES
Accrued
expenses consisted of the following as of June 30, 2017 and March 31, 2017:
|
June 30, 2017
|
|
March 31, 2017
|
Wages and taxes
|
$
|
933,874
|
|
|
$
|
829,231
|
|
Accrued interest
|
|
143,227
|
|
|
|
108,552
|
|
Total accrued expenses
|
$
|
1,077,101
|
|
|
$
|
937,783
|
|
NOTE
5 – RELATED PARTY DEBT AND TRANSACTIONS
During the year ended
March 31, 2015, the Company received a $6,000 loan from a shareholder. During the period ended March 31, 2017 the Company received
an additional $6,280 from this related party. The loan is unsecured and bears 8% interest and has an original due date of January
8, 2016. There is a total due of $12,280 as of June 30, 2017 and March 31, 2017. Interest accrued on the note as of June 30, 2017
was $1,056.
The Company is in default on the balance of this note.
During the period ending
March 31, 2016, the Company received $22,200 in unsecured non-interest bearing loans from related parties and during the period
ending March 31, 2017 received an additional $14,450, and has repaid $36,300 of these loans leaving a total due of $350 as of June
30, 2017. These loans are deemed to be short-term and are payable at the discretion of the Company.
Periodically, related parties incur expenses
for the Company and are expected to be repaid for those expenditures. As of June 30, 2017, the balance owed to related parties
for these types of expenses is $42,515. These liabilities do not have stated interest rates or due dates, but are payable at the
discretion of the Company.
The Company has a consulting agreement with
a related party to provide research into new technologies as well as essential development of current products. The amounts owed
to this related party for past work is a part of accounts payable and totals $197,450 and $53,000 for the periods ending June 30,
2017 and March 31, 2017, respectively.
On September 6, 2013, the Company entered
into an Employment Agreement with our Chief Executive Officer, Chief Financial Officer, President and Secretary. The Employment
Agreement provides for a term of two years, and has been extended for an additional two years; annual compensation of $275,000,
a signing bonus of $68,750, and options to purchase up to 1,500 shares of common stock at an exercise price of $40.00 per share.
The CEO earned $68,750 and $275,000 for the three months ended June 30, 2017 and the twelve months ended March 31, 2017 (respectively)
as a result of this agreement, these amounts contribute to the $691,778 and $645,945 of officer compensation which is included
in accrued expenses, as of June 30, 2017 and March 31, 2017.
NOTE
6 – NOTE PAYABLE
On
May 31, 2016, the Company issued a secured promissory note in the amount of $900,000. The note is due on August 1, 2017 and bears
interest at 10% per annum. The loan replaced an account payable to a legal professional to cover past due amounts and penalties
for non-payment. The note is guaranteed personally by two shareholders and collateralized by assets of the company and guarantors.
Accrued interest was $100,397 as of June 30,
2017.
On
February 21, 2017, the Company issued a non-secured promissory note in the amount of $20,000. The note is due on August 21, 2017
and bears interest at 8% per annum. The loan was in payment for professional fees related to an equity financing agreement dated
February 21, 2017, thus no cash was received by the Company.
Accrued
interest was $565 as of June 30, 2017.
RICH
PHARMACEUTICALS, INC.
NOTES
TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE
30, 2017
NOTE
7 – CONVERTIBLE NOTE PAYABLE
On
February 5, 2015, the Company issued a convertible promissory note in the amount of $54,000. The note is due on November 9, 2015
and bears interest at 8% per annum. The loan becomes convertible 180 days after the date of the note. The loan and any accrued
interest can then be converted into shares of the Company’s common stock at a rate of 58% multiplied by the market price,
which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period ending
on the latest complete trading day prior to the conversion date. During the period ending March 31, 2016 the note holder converted
$33,020 in principal into 619,652 shares of common stock, and incurred a default fee of $27,000 leaving a remaining balance of
$47,980.
On February 22, 2017, this note was
purchased for a renegotiated face value of $59,799, incurring additional financing fees of $11,819. (details are provided under
the note dated February 22, 2017 below). As of March 31, 2017 the principal and accrued interest balance is $0.
On
March 9, 2015, the Company issued a convertible note payable in the amount of $55,000. The note bears 8% interest and was originally
due on December 9, 2015, with a revised due date of June 23, 2017.
The loan becomes convertible
180 days after the date of the note. The loan and any accrued interest can then be converted into shares of the Company’s
common stock at a rate of 55% multiplied by the market price, which is the average of the lowest two (2) trading prices for the
common stock during the twenty-five (25) trading day period ending on the latest complete trading day prior to the conversion
date. During the period ending March 31, 2016 the note holder converted $38,785 in principal and $5,135 in accrued interest into
2,886,693 shares of common stock. During the period ending June 30, 2016 the note holder converted $7,377 in principal and $422
in accrued interest into 2,324,229 shares of common stock leaving a remaining balance of $ 8,838.
On February 20, 2017,
this note was consolidated with other outstanding convertible notes and purchased for a renegotiated face value of $8,838, (details
are provided under the note dated February 22, 2017 below). As of March 31, 2017 the principal and accrued interest balance is
$0.
On
March 26, 2015, the Company issued a convertible note payable in the amount of $29,680 including an original issue discount of
$1,680. The note bears 8% interest and is due on March 23, 2016.
The loan becomes convertible
180 days after the date of the note. The loan and any accrued interest can then be converted into shares of the Company’s
common stock at a rate of 58% multiplied by the market price, which is the average of the lowest three (3) trading prices for
the common stock during the ten (10) days prior to the conversion date. During the period ending March 31, 2016 the note holder
converted $10,929 in principal into 796,236 shares of common stock leaving a remaining balance of $18,751.
Accrued interest
was $7,418 as of June 30, 2017.
The Company is in default on the balance of this note.
On
May 5, 2015, the Company issued a convertible note payable in the amount of $68,900 including an original issue discount of $3,900.
The note bears 8% interest and is due on May 5, 2016.
The loan becomes convertible 180 days
after the date of the note. The loan and any accrued interest can then be converted into shares of the Company’s common
stock at a rate of 42% multiplied by the market price, which is the average of the lowest three (3) trading prices for the common
stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date. . During
the period ending March 31, 2016 the note holder converted $8,461 in principal and $566 in accrued interest into 906,763 shares
of common stock. During the period ending March 31, 2017 the note holder converted $60,439 in principal and $6,839 in accrued
interest into 44,551,004 shares of common stock leaving a remaining balance of $0. Accrued interest was $0 as of
March
31, 2017
.
RICH
PHARMACEUTICALS, INC.
NOTES
TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE
30, 2017
NOTE
7 – CONVERTIBLE NOTE PAYABLE (CONTINUED)
On
May 6, 2015, the Company issued a convertible note payable in the amount of $10,500. The note bears 8% interest and is due on
February 8, 2016.
The loan becomes convertible 180 days after the date of the note. The
loan and any accrued interest can then be converted into shares of the Company’s common stock at a rate of 50% multiplied
by the market price, which is the average of the lowest three (3) trading prices for the common stock during the thirty (30) trading
day period ending on the latest complete trading day prior to the conversion date. The Company incurred a default fee of $5,250,
leaving a balance of $15,750 as of
March 31, 2017
.
On February 22, 2017, this
note was purchased for a renegotiated face value of $20,900, incurring additional financing fees of $5,150. (details are provided
under the note dated February 22, 2017 below). As of March 31, 2017 the principal and accrued interest balance is $0.
On
August 28, 2015, the Company issued a convertible note payable in the amount of $15,000. The note bears 8% interest and is due
on August 28, 2016.
The loan becomes convertible 180 days after the date of the note. The
loan and any accrued interest can then be converted into shares of the Company’s common stock at a rate of 50% multiplied
by the market price, which is the lowest trading prices for the common stock during the twenty (20) trading day period ending
on the latest complete trading day prior to the conversion date. During the period ending
March 31, 2017
the
note holder converted $15,000 in principal and $939 in accrued interest into 4,351,619 shares of common stock leaving a remaining
balance of $0.
As of March 31, 2017 the principal and accrued interest balance is $0.
On
September 4, 2015, the Company issued a convertible note payable in the amount of $19,000. The note bears 8% interest and is due
on June 4, 2016.
The loan becomes convertible 180 days after the date of the note. The loan
and any accrued interest can then be converted into shares of the Company’s common stock at a rate of 55% multiplied by
the market price, which is the average of the lowest two (2) trading prices for the common stock during the fifteen (15) trading
day period ending on the latest complete trading day prior to the conversion date.
On February 20, 2017, this note was
consolidated with other outstanding convertible notes and purchased for a renegotiated face value of $20,280, incurring additional
financing fees of $1,280. (details are provided under the note dated February 20, 2017 below). As of March 31, 2017 the principal
and accrued interest balance is $0.
On
December 29, 2015, the Company issued a convertible note payable in the amount of $57,378. The note bears 8% interest rate and
was originally due on December 30, 2016
,
with a revised due date of June 23, 2017.
The
loan becomes convertible on
December 29
, 2015, the issue date of the note. The loan
can then be converted into shares of the Company’s common stock at a rate of 65% multiplied by the market price, which is
the average of the lowest three (3) trading prices for the common stock during the twelve (12) trading day period prior to the
conversion date. During the period ending March 31, 2016 the note holder converted $59,934 in principal and $1,222 in accrued
interest into 1,796,394 shares of common stock, and incurred a default penalty of $4,165, leaving a remaining balance of $1,609.
On February 20, 2017, this note was consolidated with other outstanding convertible notes and purchased for a renegotiated
face value of $1,609. (details are provided under the note dated February 20, 2017 below). As of March 31, 2017 the principal
and accrued interest balance is $0.
On
January 22, 2016, the Company issued a convertible note payable in the amount of $60,500. The note bears 10% interest and is due
on October 22, 2016.
The loan becomes convertible on January 22, 2016. The loan and any
accrued interest can then be converted into shares of the Company’s common stock at a rate of 50% multiplied by the market
price, which is the average of the lowest two (2) trading prices for the common stock during the twenty (20) trading day period
prior to the conversion date.
On April 4, 2017, this note was purchased for a renegotiated face value of $71,457. (details
are provided under the note dated April 4, 2017 below). As of June 30, 2017 the principal and accrued interest balance is $0.
RICH
PHARMACEUTICALS, INC.
NOTES
TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE
30, 2017
NOTE
7 – CONVERTIBLE NOTE PAYABLE (CONTINUED)
On
February 25, 2016, the Company issued a convertible note payable in the amount of $27,500. The note bears 8% interest rate and
is due on February 25, 2017.
The loan becomes convertible on
February 25, 2016
,
the issue date of the note. The loan and any accrued interest can then be converted into shares of the Company’s common
stock at a rate of 65% multiplied by the market price, which is the average of the lowest three (3) trading prices for the common
stock during the twelve (12) trading day period ending on the latest complete trading day prior to the conversion date. During
the period ending
March 31, 2017
the note holder converted $16,745 in principal and
$1,380 in interest into 3,325,000 shares of common stock leaving a remaining balance of $10,755.
On February 20, 2017,
this note was consolidated with other outstanding convertible notes and purchased for a renegotiated face value of $10,755. (details
are provided under the note dated February 20, 2017 below). As of March 31, 2017 the principal and accrued interest balance is
$0.
On
March 24, 2016, the Company issued a convertible note payable in the amount of $7,500. The note bears 8% interest rate and is
due on March 24, 2017.
The loan becomes convertible on
March 24, 2016
,
the issue date of the note. The loan and any accrued interest can then be converted into shares of the Company’s common
stock at a rate of 65% multiplied by the market price, which is the average of the lowest three (3) trading prices for the common
stock during the twelve (12) trading day period ending on the latest complete trading day prior to the conversion date.
On
February 20, 2017, this note was consolidated with other outstanding convertible notes and purchased for a renegotiated face value
of $7,500. (details are provided under the note dated February 20, 2017 below). As of March 31, 2017 the principal and accrued
interest balance is $0.
On
May 25, 2016, the Company issued a convertible note payable in the amount of $30,000. The note bears 8% interest and is due on
May 25, 2017.
The loan becomes convertible 180 days after issuance or November 21, 2016.
The loan and any accrued interest can then be converted into shares of the Company’s common stock at a rate of 50% multiplied
by the market price, which is the lowest trading prices for the common stock during the twenty (20) trading day period ending
on the latest complete trading day prior to the conversion date.
On February 20, 2017, this note was consolidated with
other outstanding convertible notes and purchased for a renegotiated face value of $38,107, incurring additional financing fees
of $8,107. (details are provided under the note dated February 20, 2017 below). As of March 31, 2017 the principal and accrued
interest balance is $0.
On
June 8, 2016, the Company issued an 8% Convertible Redeemable Promissory Note in the principal amount of $84,250. The note bears
interest at the rate of 8% and must be repaid on or before June 8, 2017. The note and any accrued interest may be converted into
shares of Company common stock at a conversion price equal to 50% of the lowest trading price during the 20-day period prior to
conversion. On February 20, 2017, this note was consolidated with other outstanding convertible notes and purchased for a renegotiated
face value of $134,214, incurring additional financing fees of $49,964. (details are provided under the note dated February 20,
2017 below). As of March 31, 2017 the principal and accrued interest balance is $0.
On
June 23, 2016, the Company issued an 8% Convertible Redeemable Promissory Note in the principal amount of $56,000. The note bears
interest at the rate of 8% and must be repaid on or before June 23, 2017. The note and any accrued interest may be converted by
lender into shares of Company common stock at a conversion price equal to 50% of the lowest trading price during the 20-day period
prior to conversion. As of June 30, 2017 the accrued interest balance is $4,566.
RICH
PHARMACEUTICALS, INC.
NOTES
TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE
30, 2017
NOTE
7 – CONVERTIBLE NOTE PAYABLE (CONTINUED)
On
July 7, 2016, the Company issued an 8% Convertible Redeemable Promissory Note in the principal amount of $58,000. The note bears
interest at the rate of 8% and must be repaid on or before July 7, 2017. The note and any accrued interest may be converted by
lender into shares of Company common stock,
180 days after issuance or January 3, 2017,
at a conversion price equal to 50% of the lowest trading price during the 20-day period prior to conversion. During the
period ended June 30, 2017, the lender converted $28,945 in principal and $1,902 in accrued interest into 69,039,300 common shares,
leaving a remaining principal balance of $29,055. As of June 30, 2017 the accrued interest balance is $2,283.
On
October 20, 2016, the Company issued an 8% Convertible Redeemable Promissory Note in the principal amount of $32,000. The note
bears interest at the rate of 8% and must be repaid on or before October 20, 2017. The note and any accrued interest may be converted
by lender into shares of Company common stock,
180 days after issuance or January 3, 2017,
at a conversion price equal to 50% of the lowest trading price during the 20-day period prior to conversion. As of June
30, 2017, the accrued interest balance is $1,774.
On
November 17, 2016, the Company issued an 8% Convertible Redeemable Promissory Note in the principal amount of $56,000. The note
bears interest at the rate of 8% and must be repaid on or before June 23, 2017. The note and any accrued interest may be converted
by lender into shares of Company common stock,
180 days after issuance or January 3, 2017,
at a conversion price equal to 50% of the lowest trading price during the 20-day period prior to conversion. As of June
30, 2017, the accrued interest balance is $4,566. The Company is in default on this note.
On
January 5, 2017, the Company issued a 10% Convertible Redeemable Promissory Note in the principal amount of $335,000. The note
bears interest at the rate of 10%, contains a $30,000 OID, and must be repaid by October 5, 2017. The note and any accrued interest
may be converted by lender into shares of Company common stock,
upon execution or January
5, 2017,
at a conversion price equal to 60% of the lowest trading price during the 10-day period prior to conversion. As
of June 30, 2017, the accrued interest is $14,866, and the OID balance is $10,002.
On February 20,
2017, the Company issued an 8% Convertible Redeemable Promissory Note in the principal amount of $563,028 which is partially funded,
the current balance consolidates unpaid convertible
notes dated March 9, 2015; September 4, 2015; December 29, 2015; February 25, 2016; March 24, 2016; May 25, 2016; June 8, 2016;
June 23, 2016; July 7, 2016; October 20, 2016; November 17, 2016. The note bears interest at the rate of 8%, and must be repaid
by October 25, 2017. The note and any accrued interest may be converted by lender into shares of Company common stock,
upon
execution or February 20, 2017,
at a conversion price equal to 60% of the lowest trading price during the 20-day period
prior to conversion. During the period ended March 31, 2017 the lender converted $34,370 in principal and $1,124 in accrued interest
into 29,775,000 shares of common stock. During the period ended June 30, 2017 the lender converted $84,877 in principal and $2,939
in accrued interest into 162,250,000 common shares, leaving a principal balance of $124,066. As of June 30, 2017, the accrued interest
is $904.
On
February 21, 2017, the Company issued an 8% Convertible Redeemable Promissory Note in the principal amount of $15,000. The note
bears interest at the rate of 8%, and must be repaid by October 25, 2017. The note and any accrued interest may be converted by
lender into shares of Company common stock,
upon execution or February 21, 2017,
at a conversion price equal to 60% of the lowest trading price during the 20-day period prior to conversion. As of June 30, 2017,
the accrued interest is $424.
RICH
PHARMACEUTICALS, INC.
NOTES
TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE
30, 2017
NOTE
7 – CONVERTIBLE NOTE PAYABLE (CONTINUED)
On
February 22, 2017, the Company issued a 10% Convertible Redeemable Promissory Note in the principal amount of $59,799, which refinances
an unpaid convertible note dated February 5, 2015. The note bears interest at the rate of 10%, and must be repaid by October 25,
2017. The note and any accrued interest may be converted by lender into shares of Company common stock,
upon
execution or February 22, 2017,
at a conversion price equal to 60% of the lowest trading price during the 20-day period
prior to conversion. As of June 30, 2017, the accrued interest is $2,097.
On
February 22, 2017, the Company issued a 10% Convertible Redeemable Promissory Note in the principal amount of $20,900, which refinances
an unpaid convertible note dated May 6, 2015. The note bears interest at the rate of 10%, and must be repaid by October 22, 2017.
The note and any accrued interest may be converted by lender into shares of Company common stock,
upon
execution or February 22, 2017,
at a conversion price equal to 60% of the lowest trading price during the 20-day period
prior to conversion. As of June 30, 2017, the accrued interest is $733.
On
April 4, 2017, the Company issued an 8% Convertible Redeemable Promissory Note in the principal amount of $71,457, which refinances
an unpaid convertible note dated January 22, 2016. The note bears interest at the rate of 8%, and must be repaid by January 4,
2018. The note and any accrued interest may be converted by lender into shares of Company common stock,
upon
execution or
April 4, 2017
,
at a conversion price equal to 60% of the lowest
trading price during the 20-day period prior to conversion. As of June 30, 2017, the accrued interest is $1,363.
On
April 18, 2017, the Company issued a 10% Convertible Redeemable Promissory Note in the principal amount of $115,000. The note
bears interest at the rate of 10%, a 10% original issue discount and the lender will hold $5000 to cover transaction costs, the
note must be repaid by January 30, 2018. The note and any accrued interest may be converted by lender into shares of Company common
stock,
upon execution or
April 4, 2017
,
at a conversion price equal to 60% of the lowest trading price during the 10-day period prior to conversion. As of June 30, 2017,
the accrued interest is $1,271, and the OID balance is $7,222.
NOTE
8 – DERIVATIVE LIABILITIES
In
accordance with AC 815, the Company has bifurcated the conversion feature of their convertible notes and recorded a derivative
liability on the date each note became convertible. The derivative liability was then revalued on each reporting date.
As
detailed in Note 7 (above) the Company has issued several convertible notes in varying amounts and terms, with the following loans
becoming convertible during the periods ending June 30, 2017 and March 31, 2017: $29,680 note dated March 26, 2015; $60,500 note
dated January 22, 2016 $56,000 note dated June 23, 2016; $58,000 note dated July 7, 2016; $32,000 note dated October 20, 2016;
$56,000 note dated November 17, 2016; $335,000 note dated January 5, 2017; $563,028 note dated February 20, 2017; $15,000 note
dated February 21, 2017; $59,799 note dated February 22, 2017; $20,900 note dated February 22, 2017; $71,457 note dated April
4, 2017; $90,000 note dated April 18, 2017.
ASC
815 requires Company management to assess the fair market value of certain derivatives at each reporting period and recognize
any change in the fair market value as another income or expense item. The Company’s only asset or liability
measured at fair value on a recurring basis is its derivative liability associated with the above convertible debt. During
the period ended June 30, 2017, the Company recorded a total change in the fair market value of the derivative liabilities of
$1,396,990.
RICH
PHARMACEUTICALS, INC.
NOTES
TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE
30, 2017
NOTE
8 – DERIVATIVE LIABILITIES (CONTINUED)
The
Company uses the Black-Scholes option pricing model to value the derivative liability upon the initial conversion date and at
each reporting period. Included in the model to value the derivative liabilities of the above loans are the following
assumptions: stock price at valuation date of $0.0007-$0.004, exercise price of $0.0001 - $0.001, dividend yield of zero, years
to maturity of 0.01918 – .5863, a risk free rate of 0.77% - 1.14%, and annualized volatility of 248% - 1087%. The above
loans were all discounted in full. Based on the valuations on the initial valuation dates for the period ending June 30, 2017,
the Company recognized debt discounts related to the conversion features totaling $350,330 and a derivative expense of $249,457
related to the excess value of the derivative liabilities. Once the loans are fully converted, the remaining derivative liability
is reclassified to equity as additional paid-in capital. As of June 30, 2017, unamortized debt discount, including original issue
discounts totaled $505,253. The derivative liabilities totaled $4,526,179 as of June 30, 2017, of which $- related to long-term
debt.
NOTE
9 – EQUITY TRANSACTIONS
The
Company has 2,000,000,000 common shares authorized with a par value of $ 0.001 per share.
The
Company has 10,000,000 preferred shares authorized with a par value of $ 0.001 per share.
The
following is a summary of the inputs used to determine the value of the warrants issued in connection with common stock using
the Black-Scholes option pricing model.
Date
|
|
March 30, 2017
|
Warrants
|
|
|
9,200,000
|
|
Stock price on grant date
|
|
$
|
0.002
|
|
Exercise price
|
|
$
|
0.002
|
|
Expected life
|
|
|
5 year
|
|
Volatility
|
|
|
120
|
%
|
Risk-free rate
|
|
|
1.96
|
%
|
Calculated value
|
|
$
|
15,278
|
|
Fair value allocation of proceeds
|
|
$
|
45,466
|
|
The
following is a summary of the warrant activity for the period March 31, 2017 to June 30, 2017:
|
Number
of warrants
|
Weighted
average exercise price
|
Outstanding,
March 31, 2017
|
9,446,533
|
$0.102
|
Granted
|
-
|
-
|
Exercised
|
-
|
-
|
Outstanding,
June 30, 2017
|
9,446,533
|
$0.102
|
Effective
June 7, 2017, the Company approved a reverse stock split of the common stock, par value $0.001 per share at a ratio of 1 for 20
of each share issued and outstanding on the effective date. These financial statements retroactively reflect the reverse stock
split for all periods.
During the period ended June 30, 2017, the Company issued common stock to satisfy convertible debt
conversions at a price below par value as obligated by contract. During this period the company issued 779,232,358 common shares
at a below par rate, incurring an adjustment to additional paid in capital of $502,027.
During
the period ended March 31, 2017, the Company received, as listed, conversion notices from various note holders. The Company issued
the following common shares to satisfy the conversion of the following debt and interest:
RICH
PHARMACEUTICALS, INC.
NOTES
TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE
30, 2017
NOTE
9 – EQUITY TRANSACTIONS (CONTINUED)
Date
|
Debt/Interest
Converted
|
Common
Stock Issued
|
Price
per Share
|
April
1, 2016
|
$2,197
|
488,316
|
$ 0.00450
|
April
4, 2016
|
$4,847
|
862,500
|
$ 0.00562
|
April
7, 2016
|
$1,750
|
486,111
|
$ 0.00360
|
April
14, 2016
|
$4,158
|
962,500
|
$ 0.00432
|
April
15, 2016
|
$1,318
|
488,311
|
$ 0.00270
|
April
26, 2016
|
$1,705
|
631,489
|
$ 0.00270
|
May
4, 2016
|
$2,067
|
485,901
|
$ 0.00426
|
May
31, 2016
|
$ 828
|
230,003
|
$ 0.00360
|
June
2, 2016
|
$9,120
|
1,500,000
|
$ 0.00608
|
June
2, 2016
|
$4,401
|
1,467,017
|
$ 0.00300
|
June
14, 2016
|
$5,847
|
1,461,795
|
$ 0.00400
|
June
17,2016
|
$5,691
|
1,422,808
|
$ 0.00400
|
June
29, 2016
|
$6,580
|
1,063,518
|
$ 0.00618
|
August
23, 2016
|
$2,567
|
1,106,487
|
$ 0.00232
|
August
29, 2016
|
$2,570
|
1,107,806
|
$ 0.00232
|
September
6, 2016
|
$2,547
|
1,097,634
|
$ 0.00232
|
September
20, 2016
|
$2,443
|
1,263,383
|
$ 0.00194
|
September
26, 2016
|
$2,946
|
1,269,672
|
$ 0.00232
|
September
28, 2016
|
$2,947
|
1,270,172
|
$ 0.00232
|
September
30, 2016
|
$3,949
|
2,553,336
|
$ 0.00154
|
October 7,
2016
|
$3,381
|
2,914,578
|
$ 0.00116
|
October 14,
2016
|
$3,380
|
2,913,784
|
$ 0.00116
|
October 21,
2016
|
$3,385
|
2,917,784
|
$ 0.00116
|
October 26,
2016
|
$3,382
|
2,915,828
|
$ 0.00116
|
October 31,
2016
|
$5,037
|
4,341,852
|
$ 0.00116
|
November 7
, 2016
|
$5,015
|
4,323,647
|
$ 0.00116
|
November 22,
2016
|
$5,513
|
4,753,008
|
$ 0.00116
|
November 29,
2016
|
$5,515
|
4,754,647
|
$ 0.00116
|
December
6, 2016
|
$4,058
|
3,497,965
|
$ 0.00116
|
January
10, 2017
|
$6,301
|
6,301,150
|
$ 0.00100
|
February
22, 2017
|
$4,290
|
3,575,000
|
$ 0.00120
|
March
13, 2017
|
$4,080
|
3,400,000
|
$ 0.00120
|
March
21, 2017
|
$4,920
|
4,100,000
|
$ 0.00120
|
March
22, 2017
|
$5,160
|
4,300,000
|
$ 0.00120
|
March
24, 2017
|
$5,460
|
4,550,000
|
$ 0.00120
|
March
30, 2017
|
$5,645
|
4,800,000
|
$ 0.00118
|
March
31, 2017
|
$5,939
|
5,050,000
|
$ 0.00118
|
|
|
|
|
March
31, 2017 Total
|
$150,939
|
90,628,002
|
|
During
the period ended June 30, 2017, the Company received, as listed, conversion notices from various note holders. The Company issued
the following common shares to satisfy the conversion of the following debt and interest:
Date
|
Debt/Interest
Converted
|
Common
Stock Issued
|
Price
per Share
|
April
5, 2017
|
$6,233
|
5,300,000
|
$0.00118
|
April
10, 2017
|
$6,586
|
5,600,000
|
$0.00118
|
April
11, 2017
|
$6,880
|
5,850,000
|
$0.00118
|
April
18, 2017
|
$7,291
|
6,200,000
|
$0.00118
|
April
20, 2017
|
$7,644
|
6,500,000
|
$0.00118
|
April
21, 2017
|
$16,464
|
14,000,000
|
$0.00118
|
April
25, 2017
|
$17,287
|
14,700,000
|
$0.00118
|
April
26, 2017
|
$26,600
|
26,600,000
|
$0.00100
|
May
1, 2017
|
$8,700
|
14,500,000
|
$0.00060
|
June
13, 2017
|
$1,200
|
10,000,000
|
$0.00012
|
June
16, 2017
|
$1,930
|
19,299,400
|
$0.00010
|
June
16, 2017
|
$1,300
|
11,000,000
|
$0.00012
|
June
20, 2017
|
$1,392
|
11,600,000
|
$0.00012
|
June
21, 2017
|
$2,314
|
23,139,900
|
$0.00010
|
June
22, 2017
|
$1,590
|
13,250,000
|
$0.00012
|
June
22, 2017
|
$1,470
|
12,250,000
|
$0.00012
|
June
26, 2017
|
$1,800
|
15,000,000
|
$0.00012
|
June
29, 2017
|
$1,980
|
16,500,000
|
$0.00012
|
June
30, 2017 Total
|
$118,660
|
231,289,300
|
|
RICH
PHARMACEUTICALS, INC.
NOTES
TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE
30, 2017
NOTE
9 – EQUITY TRANSACTIONS (CONTINUED)
(2)
Effective April 6, 2015, the Company approved the re-pricing of all 135,627 previously granted options under the Company’s
2013 Equity Incentive Plan, which had exercise prices between $1.60 per share and $3.40 per share, to $1.60 per share which was
the closing price of the Company’s common stock on April 6, 2015. All of the other terms of the options remained unchanged.
(3) Effective August 4, 2015, the Company approved the re-pricing of all 185,627 previously granted options under the Company’s
2013 Equity Incentive Plan, which had exercise prices between $1.60 per share and $0.40 per share, to $0.40 per share which was
the closing price of the Company’s common stock on August 4, 2015. All of the other terms of the options remained unchanged.
The Company revalued all existing options on January 12, 2015 and again on April 6, 2015, and again on August 4, 2015 using the
Black-Scholes option pricing model using the initial terms of the options and the modified terms of the options. The difference
in the valuations was recorded as additional expense. The re-pricing of the options resulted in the recognition of an additional
$50,448 on January 9, 2015 and an additional $9,316 on April 6, 2015, and an additional $47,463 on August 4, 2015 in related stock
based compensation expense for those periods.
The
following is a summary of the inputs used to determine the value of the options using the Black-Scholes option pricing model.
Date
|
April
6, 2015
|
June
9, 2015
|
December
15, 2015
|
March
30, 2017
|
Options
|
102,000
|
50,000
|
43,000
|
29,000,000
|
Stock
price grant date
|
$1.60
|
$0.40
|
$0.20
|
$0.002
|
Initial
Exercise price
|
$1.60
|
$0.40
|
$0.20
|
$0.002
|
Modified
Exercise price
|
$0.20
|
$0.20
|
$0.20
|
-
|
Expected
life
|
5.0
|
5.0
|
5.0
|
5.0
|
Volatility
|
99%
|
99%
|
84%
|
120%
|
Risk-free
rate
|
1.31%
|
1.74%
|
1.70%
|
1.93%
|
Calculated
value
|
$120,778
|
$14,838
|
$5,736
|
$48,017
|
Modified
value
|
$151,221
|
$16,347
|
$5,736
|
$48,017
|
The
following is a summary of the option activity for the period March 31, 2017 through June 30, 2017:
|
Number
of options
|
Weighted
average exercise price
|
Outstanding,
March 31, 2017
|
29,228,627
|
$0.004
|
Granted
|
-
|
-
|
Exercised
|
-
|
-
|
Expired
|
-
|
-
|
Outstanding,
June 30, 2017
|
29,228,627
|
$0.004
|
The
Company accounts for employee stock-based compensation in accordance with the guidance of ASC Topic 718: Compensation - Stock
Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized
in the financial statements based on their fair values
The
Company follows ASC Topic 505-50, formerly EITF 96-18, “Accounting for Equity Instruments that are Issued to Other than
Employees for Acquiring, or in Conjunction with Selling Goods and Services,” for stock options and warrants issued to consultants
and other non-employees. In accordance with ASC Topic 505-50, these stock options issued as compensation for services provided
to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the
option, whichever can be more clearly determined.
RICH
PHARMACEUTICALS, INC.
NOTES
TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE
30, 2017
NOTE
10 – COMMITMENTS AND CONTINGENCIES
The
Company leases office space on a verbal month-to-month agreement. Monthly rent is approximately $2,800.
On
July 8, 2016, the Company engaged a foreign based company to evaluate the safety and efficacy of RP-323 over a 27 month period.
The contract stipulates a commitment of $193,255 with additional fees for pass-through expenses.
The
inventor of the intellectual property which was assigned to Rich Pharmaceuticals, Inc. in July 2013 by Imagic, LLC and Richard
L. Chang’s Holdings, LLC is presently in declaratory relief litigation with Biosuccess Biotech, Co. LTD. (“Biosuccess”),
a company who was previously assigned licensing rights in the intellectual property. In connection with this litigation, on January
17, 2014, the Company received notice of a complaint filed by Biosuccess against the Company, Imagic, LLC, Richard L. Chang’s
Holdings, LLC, and Ben Chang (our CEO and a director) in the United States District Court, Central District of California Western
Division (the “District Court”). The Complaint includes allegations of patent and copyright infringement, misappropriation
of trade secrets, breach of fiduciary duty, unfair competition and other causes of actions against the Company, Imagic, LLC, Richard
L. Chang’s Holdings, LLC, and Ben Chang (the “Litigation”). The Complaint seeks relief which includes compensatory
damages, attorneys’ fees and costs, an award of treble damages, and such other relief as the court may deem just and proper.
As previously disclosed on January 4, 2016, the Litigation has been settled through a confidential mediation process supervised
by the Federal Court and the Litigation has been dismissed with prejudice by the Federal Court. The Company incurred substantial
fees in defending the litigation.
On April 1, 2017, the Company entered
into a tentative agreement with CannCodex to purchase their data base assets in return for issuing 78,000,000 shares of the Company’s
common stock. However, this agreement was not finalized and subsequently the Company is not responsible for issuance of the stock.
Unrelated to this agreement, the Company has issued short-term loans to CannCodex totaling $15,300 as of June 30, 2017.
NOTE
11 – LIQUIDITY AND GOING CONCERN
The
Company has a working capital deficit, has not yet received revenues from sales of products or services, and has incurred losses
since inception. These factors create substantial doubt about the Company’s ability to continue as a going concern
for the twelve months following the date that these financial statements were issued. The financial statements do not include
any adjustment that might be necessary if the Company is unable to continue as a going concern.
The
ability of the Company to continue as a going concern is dependent on the Company generating cash from the sale of its common
stock and/or obtaining debt financing and attaining future profitable operations. Management’s plans include selling its
equity securities and obtaining debt financing to fund its capital requirement and ongoing operations; however, there can be no
assurance the Company will be successful in these efforts.
NOTE
12 – SUBSEQUENT EVENTS
On
July 7, 2017, the Company entered into a two year consulting agreement with a related party. The agreement stipulates payment
for scientific, clinical and regulatory services to the related party of $180,000 per year ($15,000 per month) with the option
of common stock payment in lieu of cash.
RICH
PHARMACEUTICALS, INC.
NOTES
TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE
30, 2017
NOTE
12 – SUBSEQUENT EVENTS (CONTINUED)
On
July 11, 2017, Rich Pharmaceuticals , Inc. (the “Company”) entered into a Support and Collaboration Agreement
(the “Collaboration Agreement”) with Mega Bridge, Inc., a Nevada corporation to be renamed “Hypgen”) (“Hypgen”),
to support Hypgen’s development of treatments for Parkinson’s Disease. Under the terms of the agreement, the Company
will provide data, raw materials and advisory support to Hypgen to assist Hypgen with their development of treatments for Parkinson’s
Disease and the associated regulatory approval process. In exchange, Hypgen will pay the Company $100,000 and issue the Company
15,000,000 shares of Hypgen common stock. The Company plans to dividend five million of these shares to its shareholders at such
time as the Company completes the necessary corporate and regulatory requirements regarding payment of a dividend.
Relating to
the quarters ended June 30, 2017 and September 30, 0217, an “Event of Default” has occurred under the terms of each
of the Company’s previously disclosed convertible promissory notes issued to GHS Investments LLC because the Company has
not remained current in its timely filings of its Form 10Q for the period ending June 30, 2017 and September 30, 2017 with the
Securities and Exchange Commission. These Events of Default have resulted in $65,958 of penalties which is being recognized
during the quarter ended September 30, 2017.
Subsequent
to the period ended June 30, 2017, the Company received, as listed, conversion notices from various note holders. The Company
issued the following common shares to satisfy the conversion of the following debt and interest:
Date
|
Debt/Interest
Converted
|
Common
Stock Issued
|
Price
per Share
|
July
3, 2017
|
$2,088
|
17,400,000
|
$0.00012
|
July
12, 2017
|
$2,088
|
17,400,000
|
$0.00012
|
July
13, 2017
|
$2,484
|
13,800,000
|
$0.00018
|
July
14, 2017
|
$3,374
|
19,000,000
|
$0.00018
|
July
18, 2017
|
$3,374
|
19,000,000
|
$0.00018
|
July
20, 2017
|
$3,582
|
19,900,000
|
$0.00018
|
July
24, 2017
|
$6,270
|
20,900,000
|
$0.0003
|
July
25, 2017
|
$6,870
|
22,900,000
|
$0.0003
|
July
28, 2017
|
$7,200
|
24,000,000
|
$0.0003
|
August
2, 2017
|
$7,200
|
24,000,000
|
$0.0003
|
August
4, 2017
|
$9,000
|
25,000,000
|
$0.00036
|
August
8, 2017
|
$11,119
|
26,475,000
|
$0.00042
|
August
11, 2017
|
$13,920
|
29,000,000
|
$0.00048
|
August
16, 2017
|
$12,810
|
30,500,000
|
$0.00042
|
August
22, 2017
|
$6,709
|
19,168,058
|
$0.00035
|
August
25, 2017
|
$11,200
|
32,000,000
|
$0.00035
|
August
31, 2017
|
$9,600
|
32,000,000
|
$0.0003
|
September
7, 2017
|
$9,900
|
36,000,000
|
$0.00028
|
September
15, 2017
|
$9,437
|
37,900,000
|
$0.00025
|
September
22, 2017
|
$9,910
|
39,800,000
|
$0.00025
|
September
28, 2017
|
$10,408
|
41,800,000
|
$0.00025
|
October
3, 2017
|
$10,931
|
43,900,000
|
$0.00025
|
October
5, 2017
|
$7,582
|
30,448,193
|
$0.00025
|
Subsequent
Total
|
$177,056
|
622,291,251
|
|
In
accordance with ASC 855-10, the Company
has analyzed its operations subsequent to June 30, 2017
to the date these financial statements were issued, and has determined that it does not have any material subsequent events to
disclose in these financial statements other than the events described above.