Item
8.01. Other Events
In
Note 8 – Convertible Notes Payable
to the consolidated financial statements as of and for the nine months ended September
30, 2017, the Company disclosed a convertible note outstanding with a principal balance of $128,087 and $55,000 as of September
30, 2017 and December 31, 2016 as follows:
Convertible
note payable to non-related party, interest rate of 10%, unsecured, due on December 12, 2015. Currently in default. May be converted
at the option of the holder into common stock at a price equal to a 40% discount from the lowest closing bid price during the
fifteen days prior to conversion. The Company may not repay the convertible note in cash.
The
description of this note was in error and should read as follows:
Convertible
note payable to non-related party, interest rate of 10%, unsecured, due on March 24, 2016. Currently in default. May be converted
to common stock at the option of the holder at a rate equal to a 45% discount from the lowest trading price during the twenty
days prior to conversion but not less than $0.00005. The Company may not repay the convertible note in cash.
To
further clarify, the original note resulted in cash proceeds of $50,000 to the Company and contained a $5,000 original issue discount
for a total original principal balance of $55,000. Default penalties totaling $73,087 were added to the note principal subsequently
resulting in a total balance due, excluding accrued interest, of $128,087 as of September 30, 2017.
The
disclosure error is limited to the description of the note payable and all principal and accrued interest payable balances are
not impacted.
Additionally,
in the 10-K for the years ended December 31, 2015 and 2014 filed with the Securities and Exchange Commission on May 12, 2017,
the Company included the following disclosures in
Note 8 – Convertible Notes Payable
:
On
December 12, 2014, the Company received a loan totaling $50,000 from an unrelated party. The note carries interest at 10% per
annum and is due on December 12, 2015. The holder has the right to convert the principal and accrued but unpaid interest to common
stock at any time after 180 days from the note date, or June 10, 2015, at a 40% discount from the lowest closing bid price for
the Company’s common stock for the fifteen prior trading days. During the year ended December 31, 2015, the Company incurred
a default penalty equal to 10% of the principal amount of the note, or $5,000, which was added to the existing principal outstanding.
There was $55,000 and $50,000 of principal and $5,687 and $260 of accrued interest payable at December 31, 2015 and 2014.
On
June 26, 2015, the Company received a loan totaling $55,000 from an unrelated party. The note bears interest at 10% per annum
and is due March 24, 2016. Of the $55,000 total note, $5,000 was an original issue discount resulting in net cash proceeds to
the company of $50,000. Additionally, the note may be converted to common stock at the option of the holder at a rate equal to
a 45% discount from the lowest trading price during the twenty days prior to conversion but not less than $0.00005. During
the year ended December 31, 2015, the Company accepted seven separate conversion notices resulting in 57,406,767 common shares
being issued in exchange for a reduction of principal totaling $55,000. There was $0 in principal plus $2,137 and $0 in accrued
interest due at December 31, 2015 and 2014.
The
conversion notices received were applied to the incorrect convertible note payable and the disclosure should read as follows:
On
December 12, 2014, the Company received a loan totaling $50,000 from an unrelated party. The note carries interest at 10% per
annum and is due on December 12, 2015. The holder has the right to convert the principal and accrued but unpaid interest to common
stock at any time after 180 days from the note date, or June 10, 2015, at a 40% discount from the lowest closing bid price for
the Company’s common stock for the fifteen prior trading days. During the year ended December 31, 2015, the Company incurred
a default penalty equal to 10% of the principal amount of the note, or $5,000, which was added to the existing principal outstanding.
During the year ended December 31, 2015, the Company accepted seven separate conversion notices resulting in 57,406,767 common
shares being issued in exchange for a reduction of principal totaling $55,000. There was $0 and $50,000 of principal and $0 and
$260 of accrued interest payable at December 31, 2015 and 2014.
On
June 26, 2015, the Company received a loan totaling $55,000 from an unrelated party. The note bears interest at 10% per annum
and is due March 24, 2016. Of the $55,000 total note, $5,000 was an original issue discount resulting in net cash proceeds to
the company of $50,000. Additionally, the note may be converted to common stock at the option of the holder at a rate equal to
a 45% discount from the lowest trading price during the twenty days prior to conversion but not less than $0.00005. There
was $55,000 and $0 in principal plus $2,137 and $0 in accrued interest due at December 31, 2015 and 2014.
The
Company has determined there is not a material impact on the financial statements presented as a result of the error.