Notes
to the Financial Statements
(Unaudited)
NOTE
1 – ORGANIZATION
Fresh
Promise Foods, Inc. (the “Company” or “FPR”) is a consumer products and marketing company focused on the
health and wellness food and beverage sectors.
On
May 28, 2014, the Company increased the number of authorized shares of common stock to 975,000,000 from 475,000,000). On September
1, 2014, the Company increased the number of authorized shares of common stock to 2,000,000,000 from 975,000,000.
In
January 1, 2015 the Company completed a 1 for 150 reverse stock split. All share and per share amounts have been presented to
give retroactive effective for this reverse stock split.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United
States and are expressed in US dollars. The Company has a calendar year-end.
Interim
Financial Statements
The
accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles
generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"),
and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's December 31,
2014 report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been
reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for
the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial
statements for the most recent year end, December 31, 2014, have been omitted.
Cash
and Cash Equivalents
The
Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.
Basic
and Diluted Loss per Common Share
Basic
net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during
the period after giving retroactive effect to the reverse and forward splits. Diluted net loss per share is computed by dividing
net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each
period. There were no potentially dilutive shares outstanding as of September 30, 2015 and January 31, 2015. There were shares
of convertible preferred stock and convertible loans outstanding at both periods, which are not considered dilutive because the
Company incurred operating losses during each fiscal year.
Recently
Issued Accounting Standards
The
Company 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.
Derivative
Liabilities
The
Company will recalculate its derivative liability in a separate filing when reviewed and approved by the Companies auditor.
NOTE
3 – PROPERTY AND EQUIPMENT
Property
and equipment is recorded at cost. The Company depreciates the equipment using the straight-line method over the estimated useful
lives of the equipment, which ranges from three to seven years. Depreciation expense was $1,978 for the nine months ended September
30, 2015. Property and equipment consisted of the following at September 30, 2015 and December 31, 2014:
|
|
September
30, 2015
|
|
December
31, 2014
|
|
|
|
|
|
Furniture
and fixtures
|
|
|
3,389
|
|
|
$
|
3,389
|
|
Production
equipment
|
|
|
—
|
|
|
|
97,342
|
|
Total
|
|
|
9,305
|
|
|
|
100,731
|
|
Less:
Accumulated depreciation
|
|
|
(1,978
|
)
|
|
|
(10,172
|
)
|
Property
and equipment, net.
|
|
|
7,327
|
|
|
$
|
90,559
|
|
NOTE
4 – FAIR VALUE MEASUREMENTS
The
Company has adopted the guidance under ASC Topic 820 for financial instruments measured on a fair value on a recurring basis.
ASC Topic 820 establishes a fair value hierarchy, giving the highest priority to quoted prices in active markets and the lowest
priority to unobservable data and requires disclosures for assets and liabilities measured at fair value based on their level
in the hierarchy. Further authoritative accounting guidance (ASU No. 2009-05) under ASC Topic 820, provides clarification that
in circumstances in which a quoted price in an active market for the identical liabilities is not available, a reporting entity
is required to measure fair value using one or more of the techniques provided for in this update.
The
standard describes a fair value hierarchy based on three levels of input, of which the first two are considered observable and
the last unobservable, that may be used to measure fair value, which are the following:
Level
1 – Quoted prices in active markets for identical assets and liabilities.
Level
2 – Input other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets
of liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable
market data for substantially the full term of the asset or liabilities.
Level
3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of
the assets or liabilities.
Our
assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers
factors specific to the asset or liability.
The
Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities
from Equity” and ASC 815, “Derivatives and Hedging”. Derivative liabilities are adjusted to reflect fair value
at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to
fair value of derivatives. The effects of interactions between embedded derivatives are calculated and accounted for in arriving
at the over- all fair value of the financial instruments. In addition, the fair value of free standing derivative instruments
such as warrant and option derivatives are valued using the Black-Scholes modes.
The
Company uses Level 3 inputs for its valuation methodology for the embedded conversion option liabilities as their fair value were
determined by using the Black Scholes option-pricing model based on various assumptions. The Company’s derivative liabilities
are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results
of operations as adjustments to fair value of derivatives.
The
following table sets forth the liabilities at September 30, 2015, which is recorded on the balance sheet at fair value on a recurring
basis by level within the fair value hierarchy. As required, these are classified based on the lowest level of input that is significant
to the fair value measurement:
|
|
|
|
|
Fair Value Measurements
at Reporting Date Using
|
|
|
|
|
|
Quoted
prices in
|
|
Significant
Other
|
|
|
Significant
|
|
|
|
|
|
|
Active
Markets for
|
|
Observable
|
|
|
Unobservable
|
|
|
|
|
|
|
Identical
Assets
|
|
Inputs
|
|
|
Inputs
|
|
Description
|
|
9/30/2015
|
|
|
(Level
l)
|
|
(Level
2)
|
|
|
(Level
3)
|
|
Convertible promissory notes with
embedded conversion option
|
|
$
|
0
|
|
|
-0-
|
|
|
-0-
|
|
|
$
|
969,212
|
|
Total
|
|
$
|
0
|
|
|
-0-
|
|
|
-0-
|
|
|
$
|
969,212
|
|
The
following table sets forth a summary of change in fair value of our derivative liabilities for the period ended September 30,
2015:
Beginning
Balance
|
|
$
|
862,485
|
|
Change in fair value of embedded conversion
features of convertible promissory notes and warrants included in earnings
|
|
|
—
|
|
Embedded conversion option
and warrant liability recorded in connection with the issuance of convertible promissory notes
|
|
|
—
|
|
Change in fair value of
embedded conversion features of convertible promissory notes due to conversion
|
|
|
—
|
|
Ending Balance
|
|
|
862,485
|
|
NOTE
5 – RELATED PARTY TRANSACTIONS
On
January 28, 2014, the Company converted $11,000 of a $22,000 convertible note held by a related party into 24,445 common shares.
The note had been purchased from a former officer of the Company based on the contractual conversions terms per agreement.
During
the nine months ended September 30, 2015, the Company received proceeds of $0 and made repayments of $0 from and to
related parties. At September 30, 2015, the Company owed related parties $835,447 in connection with convertible notes
payable.
NOTE
6 – NOTES AND CONVERTIBLE NOTES PAYABLE
Convertible
notes payable consist of the following at September 30, 2015 and December 31, 2014:
|
|
September
30, 2015
|
December
31,
2014
|
On January
16, 2012 the Company executed a promissory note for $50,000. The note bears interest at 10 % and is secured by common stock
of the Company. The note is convertible into common stock of the Company at $0.05 per share. In 2012, $30,000of the note was
converted to 17,595 shares of common stock of the Company. In 2013 the note maturity date was extended to September 30, 2015.
Due to the features in this note, the Company could not determine if sufficient shares in the Company stock would be available
to fulfill all conversion obligations. Accordingly, a derivative liability was recorded for this note using the Black Scholes
Method to value the derivative liability with the following assumptions: Risk Free Interest rate of .025, volatility of 882%,
and an assumed dividend rate of 0%: with the expected term of 92 days.
|
$
|
—
|
$
|
20,000
|
|
|
|
|
|
|
|
On March 5, 2013 the
Company executed a promissory note for $45,000. In 2014 the note was modified into three notes of $15,000 each. The notes
bear interest at 8 % are unsecured. The notes matured March 5, 2014 but were extended to September 30, 2015. One of the notes
was sold to a third party and amended. Due to the amended features the Company has recorded a derivative liability for this
note using the Black Scholes Method to value the derivative liability with the following assumptions: Risk Free Interest rate
of .025, volatility of 765%, and an assumed dividend rate of 0%: with the expected term of 92 days. The remaining two $15,000
notes are also convertible into common stock at the market price but no derivative liability was recorded. In February 2014,
the third party converted $5,000 of note into 16,955 shares of common stock of the Company. During the first quarter of 2015,
the third party converted $1,764 of the note into 352,941 shares of common stock of the Company. During the second quarter
of 2015, the third party converted $6,246 of the note into 2,621,621 shares of common stock of the Company.
|
|
—
|
|
10,015
|
|
|
|
|
|
|
|
On March 5, 2013 the
Company executed a promissory note for $45,000. In 2014 the note was modified into three notes of $15,000 each. The notes
bear interest at 8 % are unsecured. The notes matured March 5, 2014 but were extended to September 30, 2015. One of the notes
was sold to a third party and amended. Due to the amended features the Company has recorded a derivative liability for this
note using the Black Scholes Method to value the derivative liability with the following assumptions: Risk Free Interest rate
of .025, volatility of 765%, and an assumed dividend rate of 0%: with the expected term of 92 days. The remaining two $15,000
notes are also convertible into common stock at the market price but no derivative liability was recorded. On February 10,
2015, the note was purchased and the terms and the maturity date were changed. The new terms bore a 12% interest rate. The
note can be converted into common stock at a discount of 55% off the conversion price. The conversion price is the average
3 day lowest closing sales price during a 10 day period prior to conversion, but no less than $0.0001. A debt extinguishment
was booked due to the changes in terms. The note matures on February 10, 2016.
|
|
—
|
|
15,000
|
|
|
|
|
|
|
|
On September 11, 2013
the Company executed a promissory note for $15,000 as payment to a service provider. The note matured September 11, 2014 but
was extended to September 30, 2015. The note is convertible into common stock of the Company at a discount of 35% off the
average one day bid price the day prior to conversion with the expected term of 225 days. Due to the discount feature we have
recorded a liability of $8,077, or put premium, as part of the carrying value of this note. The note is convertible at any
time prior to maturity and bears interest at 6% per annum. During the second quarter of 2015, the third party converted $4,257
of the note into 7,740,600 shares of common stock of the Company.
|
|
—
|
|
15,000
|
|
|
|
|
|
|
|
On
October 29, 2013 the Company executed a promissory note for $2,500. The note bears interest at 6% and is secured by common
stock of the Company. The loan matures April 29, 2014 but was extended to September 30, 2015. The note is convertible at the
lower of a day’s discount of 35% off the prior closing bid price or $0.01. The note also provided for purchase of 133,334
shares by execution of a warrant agreement. The agreement expires two years from the date of the note. Under this agreement
shares can be purchased for $0.02 unless the Company sells stock at a price below that level. Should this occur the conversion
price is reduced to that lower price. The Company used the Black Scholes Method to value the derivative liability with the
following assumptions: Risk Free Interest rate of .025, volatility of 599%, and an assumed dividend rate of 0% with the expected
term of 92 days
|
|
—
|
|
2,500
|
|
|
|
|
|
|
|
On
January 01, 2014 the Company executed a promissory note for $20,000 as payment to a service provider. The note is convertible
into common stock of the Company at a discount of 35% off the average one day bid price the day prior to conversion. Due to
the discount feature we have recorded a liability of $10,769, or put premium, as part of the carrying value of this note.
The note is convertible at any time prior to maturity and bears interest at 6% per annum. The note matured on January 01,
2015 but was extended to September 30, 2015. The note is considered a stock settled debt instrument. The expected term is
92 days.
|
|
—
|
|
20,000
|
|
|
|
|
|
|
|
In
February 2014, a note with a face value of $22,000 was sold to a third party. In February 2014, the third party converted
$11,000 of the note into 24,445 shares of common stock of the Company. During the first quarter of 2015, the third party converted
$2,738 of the note into 730,000 shares of common stock of the Company. The note matured on January 01, 2015 but was extended
to September 30, 2015. The note is considered a stock settled debt instrument. The expected term is 92 days.
|
|
—
|
|
11,000
|
|
|
|
|
|
|
|
On
January 23, 2014 the Company executed a promissory note for $6,000. The note bears interest at 9.875 % and is secured by common
stock of the Company. The note can be converted into common stock at a discount of 30% off the conversion price. The conversion
price is the average 3 day lowest closing sales price during a 10 day period prior to conversion, but no less than $0.0001.
The Company has recorded a derivative liability for this note using the Black Scholes Method to value the derivative liability
with the following assumptions: Risk Free Interest rate of .025, volatility of 321%, and an assumed dividend rate of 0% with
the expected term of 92 days. The note matured on January 23, 2015 but was extended to September 30, 2015.
|
|
—
|
|
6,000
|
|
|
|
|
|
|
|
On
March 17, 2014 the Company executed a promissory note for $25,000. The note bears interest at 12 % and is secured by common
stock of the Company. The note can be converted into common stock at a discount of 40% off the conversion price. The conversion
price is the average of the lowest 3 day trading price during a 10 day period prior to conversion, unless the Company sells
or issues stock at a price lower than the conversion price. Should this occur the conversion price is reduced to that lower
price. The Company has recorded a derivative liability for this note using the Black Scholes Method to value the derivative
liability with the following assumptions: Risk Free Interest rate of .025, volatility of 296%, and an assumed dividend rate
of 0% with the expected term of 92 days. In November 2014, the third party converted $7,135 of note into 366,598 shares of
common stock of the Company. During the first quarter of 2015, the third party converted $6,612 of the note into
1,569,580 shares of common stock of the Company. During the second quarter of 2015, the third party converted $10,683 of the
note into 13,427,276 shares of common stock of the Company. The note matured on March 17, 2015 but was extended to September
30, 2015.
|
|
—
|
|
17,865
|
|
|
|
|
|
|
|
On
June 9, 2014 the Company executed a promissory note for $30,000. The note bears interest at 8% and is secured by common stock
of the Company. The note can be converted into common stock at a discount of 42% off of the conversion price. The conversion
price is the average lowest 3 day trading price during a 10 day period prior to conversion. The Company has recorded the derivative
liability for this note using the Black Scholes Method to value the derivative liability with the following assumptions: Risk
free interest rate of .025, volatility of 276% and an assumed dividend of 0% with the expected term of 92 days. During the
first quarter of 2015, the third party converted $12,098 of the note into 2,656,309 shares of common stock of the Company.
During the second quarter of 2015, the third party converted $12,011 of the note into 21,721,132 shares of common stock of
the Company. The note matured on June 9, 2015 but was extended to September 30, 2015.
|
|
—
|
|
30,000
|
|
|
|
|
|
|
|
On
June 11, 2014 the Company executed a promissory note for $86,500. The note bears interest at 12% and is secured by common
stock of the Company. The note can be converted into common stock at a discount of 45% off of the conversion price. The conversion
price is the average lowest 3 day trading price during a 10 day period prior to conversion. The conversion price is the average
lowest 3 day trading price during a 10 day period prior to conversion, or $0.0135 whichever is greater. The Company has recorded
the derivative liability for this note using the Black Scholes Method to value the derivative liability with the following
assumptions: Risk free interest rate of .025, volatility of 276% and an assumed dividend of 0% with the expected term of 92
days. During the first quarter of 2015, the third party converted $40,040 of the note into 6,860,160 shares of common stock
of the Company. During the second quarter of 2015, the third party converted $43,098 of the note into 54,315,828 shares of
common stock of the Company. The note matured on June 11, 2015 but was extended to September 30, 2015.
|
|
—
|
|
86,500
|
|
|
|
|
|
|
|
On
June 11, 2014 the Company executed a promissory note for $86,291 for the note plus interest on the note executed March 13,
2013. The note bears interest at 12% and is secured by common stock of the Company. The note can be converted into common
stock at a discount of 45% off of the conversion price. The conversion price is the average lowest 3 day trading price during
a 10 day period prior to conversion, or $0.0135 whichever is greater. The Company has recorded the derivative liability for
this note using the Black Scholes Method to value the derivative liability with the following assumptions: Risk free interest
rate of .025, volatility of 276% and an assumed dividend of 0%. In June 2014, the third party converted $13,319 of note into
56,000 shares of common stock of the Company. In July 2014, the third party converted $4,510 of note into 40,000 shares of
common stock of the Company. In August 2014, the third party converted $5,077 of note into 93,334 shares of common stock of
the Company. In September 2014, the third party converted $12,311 of note into 420,000 shares of common stock of the Company.
In October 2014, the third party converted $14,111 of note into 655,334 shares of common stock of the Company. In November
2014, the third party converted $13,816 of note into 753,334shares of common stock of the Company. In December 2014, the third
party converted $4,670 of note into 626,667 shares of common stock of the Company. During the first quarter of 2015, the third
party fully converted the remaining balance of the note into 1,170,667 shares of common stock of the Company.
|
|
—
|
|
5,542
|
|
|
|
|
|
|
|
On
June 30, 2014 the Company executed a promissory note for $88,500. The note bears interest at 6% and is secured by common stock
of the Company. The note can be converted into common stock at the bid price on day prior to conversion. On February 10, 2015,
the note was purchased and the terms and maturity date were changed. The note matures on February 10, 2016. The new terms
bore a 8% interest rate. The note can be converted into common stock at a discount of 55% off the conversion price. The conversion
price is the average 3 day lowest closing sales price during a 10 day period prior to conversion, but no less than $0.0001.
A debt extinguishment was booked due to the changes in terms. During the first quarter of 2015, the third party converted
$9,382 of the note into 1,834,300 shares of common stock of the Company. During the second quarter of 2015, the third party
converted $16,601 of the note into 13,758,452 shares of common stock of the Company. The expected term is 225 days.
|
|
—
|
|
88,500
|
|
|
|
|
|
|
|
On
August 8, 2014 the Company executed a promissory note for $50,000. The note bears interest at 6% and is secured by common
stock of the Company. The note can be converted into common stock at a discount of 35% off of the conversion price. The conversion
price is the average bid price on the 3 days prior to the date of conversion. Or the closing price of the issuer
on the date of this note of $.001, whichever is lower. On April 8, 2015 the note was modified by $15,000. The terms
of that portion of the note has changed and bears interest at 6% are unsecured. The note has a maturity date of August 8,
2015. The expected term of the note is 39 days.
|
|
—
|
|
50,000
|
|
|
|
|
|
|
|
On
April 3, 2014 the Company executed a promissory note for $42,500. The note bears interest
at 22% and is secured by common stock of the Company. The note can be converted into
common stock at a discount of 45% off of the conversion price. The conversion price is
the average lowest 3 day trading price during a 10 day period prior to conversion, unless
the Company sells or issues stock at a lower price than the
conversion
price. Should this occur the conversion prices is reduced to the lower price. The Company
has recorded the derivative liability for this note using the Black Scholes Method to
value the derivative liability with the following assumptions: Risk free interest rate
of .025, volatility of 292% and an assumed dividend of 0% with the expected term of 92
days. During the first quarter of 2015, the third party converted $17,525 of the note
into 3,728,015 shares of common stock of the Company. During the second quarter of 2015,
the third party converted $19,671 of the note into 29,078,917 shares of common stock
of the Company. The note matured on April 3, 2015 but was extended to September 30, 2015
|
|
—
|
|
42,500
|
|
|
|
|
|
|
|
On
July 8, 2014 the Company executed a promissory note for $42,500. The note bears interest at 22% and is secured by common stock
of the Company. The note can be converted into common stock at a discount of 45% off of the conversion price. The conversion
price is the average lowest 3 day trading price during a 10 day period prior to conversion, unless the Company sells or issues
stock at a lower price than the conversion price. Should this occur the conversion prices is reduced to the lower price. The
Company has recorded the derivative liability for this note using the Black Scholes Method to value the derivative liability
price. The Company has recorded the derivative liability for this note using the Black Scholes Method to value the derivative
liability with the following assumptions: Risk free interest rate of .025, volatility of 270% and an assumed dividend of 0%
with the expected term of 7 days. The note matured on July 8, 2015 but was extended to September 30, 2015.iltiy with the following
assumptions: Risk free interest rate of .025, volatility of 270% and an assumed dividend of 0% with the expected term of 7
days. The note matured on July 8, 2015 but was extended to September 30, 2015.
|
|
—
|
|
42,500
|
|
|
|
|
|
|
|
On
September 5, 2014 the Company executed a promissory note for $52,500. The note bears interest at 12% and is secured by common
stock of the Company. The note can be converted into common stock at a discount of 55% off of the conversion price. The
conversion price is the average lowest 3 day trading price during a 10 day period prior to conversion, or the stock can be
converted at $0.0135, whichever is greater. This note matures on September 5, 2015. he Company has recorded a derivative
liability for this note using the Black Scholes Method to value the derivative liability with the following assumptions: Risk
Free Interest rate of .025, volatility of 425%, and an assumed dividend rate of 0%.
|
|
—
|
|
52,500
|
|
|
|
|
|
|
|
On
October 27, 2014 the Company executed a promissory note for $52,500. The note bears interest at 12% and is secured by common
stock of the Company. The note can be converted into common stock at a discount of 55% off of the conversion price. The conversion
price is the average lowest 3 day trading price during a 10 day period prior to conversion, or the stock can be converted
at $0.0135, whichever is greater. This note matures on October 27, 2015. The Company has recorded a derivative liability for
this note using the Black Scholes Method to value the derivative liability with the following assumptions: Risk Free Interest
rate of .025, volatility of 373%, and an assumed dividend rate of 0% with the expected term of 77 days.
|
|
—
|
|
52,500
|
|
|
|
|
|
|
|
On
December 11, 2014 the Company executed a promissory note for $40,000. The note bears interest at 6% and is secured by common
stock of the Company. The note can be converted into common stock at a discount of 35% off of the conversion price. The conversion
price is the average bid price on the 3 days prior to the date of conversion. Or the closing price of the issuer on the date
of this note of $.001. On June 11, 2015, the note was purchased and the terms and maturity date were changed. The
new terms bore a 6% interest rate. The note can be converted into common stock at a discount of 50% off the conversion price.
The conversion price is the average 3 day lowest closing sales price during a 10 day period prior to conversion. A debt extinguishment
was booked due to the changes in terms. The note matures on June 11, 2016. The Company has recorded a derivative liability
for this note using the Black Scholes Method to value the derivative liability with the following assumptions: Risk Free Interest
rate of .025, volatility of 337%, and an assumed dividend rate of 0% with the expected term of 164 days.
|
|
—
|
|
40,000
|
|
|
|
|
|
|
|
On
January 5, 2015 the Company executed a promissory note for $20,000. The note bears interest at 6% and is secured by common
stock of the Company. The note can be converted into common stock at a discount of 70% off of the conversion price. The conversion
price is the average bid price on the 3 days prior to the date of conversion. Or the closing price of the issuer
on the date of this note of $.001. The note matures on January 5, 2016. The Company has recorded a derivative liability for
this note using the Black Scholes Method to value the derivative liability with the following assumptions: Risk Free Interest
rate of .025, volatility of 328%, and an assumed dividend rate of 0% with the expected term of 189 days.
|
|
—
|
|
—
|
|
|
|
|
|
|
|
On
January 31, 2015 the Company executed a promissory note for $176,267. The note bears interest at 6% and is secured by common
stock of the Company. The conversion price is the bid price on the day prior to the date of conversion. Or the closing price
of the issuer on the date of this note of $.001. The note matures on January 31, 2016. The Company has recorded a derivative
liability for this note using the Black Scholes Method to value the derivative liability with the following assumptions: Risk
Free Interest rate of .025, volatility of 317%, and an assumed dividend rate of 0% with the expected term of 185 days.
|
|
—
|
|
—
|
|
|
|
|
|
|
|
On
February 10, 2015 the Company executed a promissory note for $52,500. The note bears interest at 8% and is secured by common
stock of the Company. The note can be converted into common stock at a discount of 55% off of the conversion price. The conversion
price is the average bid price on the 3 days prior to the date of conversion. Or the closing price of the issuer on the date
of this note of $.001. The note matures on February 10, 2016 The Company has recorded a derivative liability for this note
using the Black Scholes Method to value the derivative liability with the following assumptions: Risk Free Interest rate of
.025, volatility of 285%, and an assumed dividend rate of 0% with the expected term of 225 days.
|
|
—
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|
—
|
|
|
|
|
|
|
|
On
February 13, 2015 the Company executed a promissory note for $30,000. The note bears interest at 8% and is secured by common
stock of the Company. The note can be converted into common stock at a discount of 42% off of the conversion price. The
conversion price is the average bid price on the 3 days prior to the date of conversion. Or the closing price of the issuer
on the date of this note of $.001. The note matures on February 13, 2016. The Company has recorded a derivative liability
for this note using the Black Scholes Method to value the derivative liability with the following assumptions: Risk Free Interest
rate of .025, volatility of 269%, and an assumed dividend rate of 0% with the expected term of 228 days.
|
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—
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—
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|
|
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|
On
February 13, 2015 the Company executed a promissory note for $50,000. The note bears interest at 8% and is secured by common
stock of the Company. The note can be converted into common stock at a discount of 70% off of the conversion price. The conversion
price is the average bid price on the 3 days prior to the date of conversion. Or the closing price of the issuer on the date
of this note of $.001. The note matures on February 13, 2016 The Company has recorded a derivative liability for this note
using the Black Scholes Method to value the derivative liability with the following assumptions: Risk Free Interest rate of
.025, volatility of 269%, and an assumed dividend rate of 0% with the expected term of 228 days.
|
|
—
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—
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|
|
|
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|
On
January 26, 2015 the Company executed a promissory note for $28,000. The note bears interest at 12% and is secured by common
stock of the Company. The note can be converted into common stock at 50% of the Market price. The note matures on January
26, 2016. The note is considered a stock settled debt instrument. The expected term is 210 days.
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—
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—
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|
On
March 17, 2015 the Company executed a promissory note for $28,000. The note bears interest at 12% and is secured by common
stock of the Company. The note can be converted into common stock at 50% of the Market price. The note matures on March 17,
2016. The note is considered a stock settled debt instrument. The expected term is 261 days.
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—
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—
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|
On
June 30, 2015, the Company executed a promissory note for $150,333. The note bears interest at 6% and is secured by common
stock of the Company. The note can be converted into common stock at bid price on the day prior to conversion. The note matures
on June 30, 2016. The Company has recorded a derivative liability for this note using the Black Scholes Method to value the
derivative liability with the following assumptions: Risk Free Interest rate of .025, volatility of 46%, and an assumed dividend
rate of 0% with the expected term of 366 days.
|
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—
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—
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|
On
June 30, 2015, the Company executed a promissory note for $62,229. The note bears interest at 6% and is secured by common
stock of the Company. The note can be converted into common stock at bid price on the day prior to conversion. The note matures
on June 30, 2016. The Company has recorded a derivative liability for this note using the Black Scholes Method to value the
derivative liability with the following assumptions: Risk Free Interest rate of .025, volatility of 46%, and an assumed dividend
rate of 0% with the expected term of 366 days.
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—
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—
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|
On
June 12, 2015, the Company executed a promissory note for $40,000. The note bears interest at 6% and is secured by common
stock of the Company. The note can be converted into common stock at average closing price of the previous 3 days. The note
matures on June 12, 2016. The Company has recorded a derivative liability for this note using the Black Scholes Method to
value the derivative liability with the following assumptions: Risk Free Interest rate of .025, volatility of 89%, and an
assumed dividend rate of 0% with the expected term of 348 days.
|
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—
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—
|
|
|
|
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|
On April
10, 2015, the Company executed a promissory note for $31,500. The note bears interest at 6% and is secured by common stock
of the Company. The note can be converted into common stock at 60% of the average of the two lowest closing prices in the
25days price to conversion. The note matures April 10, 2015. The note is considered a stock settled debt instrument. The expected
term is 285 days.
|
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—
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—
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|
On April 4, 2015, the
Company executed a promissory note for $25,000. The note bears interest at 6% and is secured by common stock of the Company.
The note can be converted into common stock at average closing price of the previous 3 days. The note matures on April 4,
2016. The Company has recorded a derivative liability for this note using the Black Scholes Method to value the derivative
liability with the following assumptions: Risk Free Interest rate of .025, volatility of 185%, and an assumed dividend rate
of 0% with the expected term of 279 days.
|
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—
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—
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|
On May 13, 2015, the
Company executed a promissory note for $25,000. The note bears interest at 6% and is secured by common stock of the Company.
The note can be converted into common stock at average closing price of the previous 3 days. The note matures on May 13, 2016.
The Company has recorded a derivative liability for this note using the Black Scholes Method to value the derivative liability
with the following assumptions: Risk Free Interest rate of .025, volatility of 135%, and an assumed dividend rate of 0% with
the expected term of 318 days.
|
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—
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—
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|
On June 23, 2015, the
Company executed a promissory note for $25,000. The note bears interest at 6% and is secured by common stock of the Company.
The note can be converted into common stock at average closing price of the previous 3 days Then note matures on June 23,
2016. The Company has recorded a derivative liability for this note using the Black Scholes Method to value the derivative
liability with the following assumptions: Risk Free Interest rate of .025, volatility of 68%, and an assumed dividend rate
of 0% with the expected term of 359 days.
|
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—
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—
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|
On June 16, 2015, the
Company executed a promissory note for $25,000. The note bears interest at 6% and is secured by common stock of the Company.
The note can be converted into common stock at average closing price of the previous 3 days. The note matures on June 16,
2016. The Company has recorded a derivative liability for this note using the Black Scholes Method to value the derivative
liability with the following assumptions: Risk Free Interest rate of .025, volatility of 86%, and an assumed dividend rate
of 0% with the expected term of 352 days.
|
|
—
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—
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|
On May 28, 2015, the Company
executed a promissory note for $23,000. The note bears interest at 12% and is secured by common stock of the Company. The
note can be converted into common stock at 55% of the Conversion price. The conversion price is the average closing bid price
on the 3 days prior to the date of conversion. The note matures on May 28, 2016. The Company has recorded a derivative liability
for this note using the Black Scholes Method to value the derivative liability with the following assumptions: Risk Free Interest
rate of .025, volatility of 110%, and an assumed dividend rate of 0% with the expected term of 333 days.
|
|
—
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—
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|
On April 1, 2015, the
Company executed a promissory note for $12,000. The note bears interest at 12% and is secured by common stock of the Company.
The note can be converted into common stock at average closing price of the previous 3 days. The note matures on April 1,
2016. The Company has recorded a derivative liability for this note using the Black Scholes Method to value the derivative
liability with the following assumptions: Risk Free Interest rate of .025, volatility of 185%, and an assumed dividend rate
of 0% with the expected term of 276 days.
|
|
—
|
|
—
|
|
|
|
|
|
|
|
On April 30, 2015, the
Company executed a promissory note for $7,500. The note bears interest at 6% and is secured by common stock of the Company.
The note can be converted into common stock at 50% of the Market price. The Market price is the average closing bid price
on the 3 days prior to the date of conversion. The note matures on April 30. 2016. The note is considered a stock settled
debt instrument. The expected term is 305 days.
|
|
—
|
|
—
|
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|
|
On April 8, 2015, the
Company executed a promissory note for $7,408. The note bears interest at 6% and is secured by common stock of the Company.
The note can be converted into common stock at 50% of the Market price. The Market price is the average closing bid price
on the 3 days prior to the date of conversion. During the second quarter of 2015, the third party converted $7,592 of the
note into 8,633,577 shares of common stock of the Company. The note matures on April 8, 2016. The note is considered a stock
settled debt instrument. The expected term is 283 days
|
|
—
|
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—
|
|
|
|
|
|
|
|
Premium liability
|
|
—
|
|
29,846
|
|
|
|
|
|
|
|
Unamortized debt discount
on derivative liabilities
|
|
—
|
|
(248,811
|
)
|
|
|
|
|
|
|
Total convertible notes
outstanding, net of unamortized discounts
|
$
|
—
|
$
|
388,957
|
|
NOTE
7 – STOCKHOLDERS’ EQUITY (DEFICIT)
The
authorized common stock of the Company consists of 8,999,999,999 shares with a par value $0.00001. The Company also has 10,000,000
shares of Preferred A stock authorized and 10,000,000 shares of Preferred A stock issued.
During
the nine months ended September 30, 2015, 0 common shares were issued upon the conversion of debt having an aggregate
principal amount of $ 0. From October 1, 2015 until April ___, 2018 _____ common shares were issued upon the conversion
of debt having an aggregate principal amount of $______.
At
September 30, 2015 there were _____shares of Common Stock outstanding and ____ shares outstanding at April ___, 2018.
Series
A Preferred stock was validated on 3/30/2017 (see Subsequent Events)
.
Series
B Preferred - Cancelled
Series
C Preferred - Cancelled
Dividends
The
holders of Series A Preferred Stock are entitled to receive dividends when, as and if declared by the Board of Directors, in its
sole discretion.
The
Board of Directors has not designated a % of dividends to be paid and as such no dividends have been accumulated to date. The
Board has not declared any dividends to be paid therefore no accrual has been recorded.
Liquidation
Rights
Series
A Convertible Stock
The
Preferred Series A Shares will be entitled to 2/3 of the total vote on all matters voted on by the shareholders of the Corporation
and shall be further entitled to such voting rights as may be expressly required by law.
Warrants
Common
Stock Warrants
The
Company did not issue any warrants during the quarter ending September 30, 2015.
The
following table sets forth common share purchase warrants outstanding as of June 30, 2015 and December 31, 2014:
Outstanding
warrants December 31, 2014
|
|
|
4,533,334
|
|
|
|
0.02
|
|
Outstanding
warrants September 30, 2015
|
|
|
4,533,334
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
Common
stock issuable upon exercise of warrants
|
|
|
4,533,334
|
|
|
|
0.02
|
|
Outstanding
warrants at September 30, 2015 have a weighted average remaining contractual life of 3 months. All warrants have an average weighted
exercise price of $0.02. The warrants had an intrinsic value of $0 at June 30, 2015 and December 31, 2014.
There
are no warrants outstanding at April 6, 2018.
NOTE
8 – GOING CONCERN
The
Company decided to change its business plan and is in the process of introducing its new product line. However, it has negative
stockholders’ equity and working capital balances and no committed sources for debt or equity financing.
There
is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available,
will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues
received from business operations. However, there is no assurance that the Company will attain profitability. The accompanying
financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern
NOTE
9 – SUBSEQUENT EVENTS
From
October 1, 2015 to April 6, 2018:
The
Company has evaluated all transactions from September 30, 2015 through the financial statement issuance date for subsequent event
disclosure consideration and has determined that there were no reportable events that occurred during that subsequent period to
be disclosed or recorded except as disclosed in Note 6 and the items listed below:
|
·
|
1/6/2016
– Director Resignation and Release Agreement.
|
|
·
|
1/12/2016
– Letter of Resignation from Kevin Quirk.
|
|
·
|
3/30/2017
– Order granting in PART MOTION for Default Judgment entered into in Civil Case
2:13-CV-00448-JAD-9JK in favor of Plaintiffs.
|
|
·
|
The
Plaintiffs MOTION FOR DEFAULT Judgment was granted against Hellwig, Anthus and Stakool/Fresh
Promise jointly and severely by Jennifer A. Dorcey, United States District Court Judge,
District of Nevada, as follows:
|
|
·
|
Clinton
Hall, LLC - $196,800
|
|
·
|
Richard
Maher - $25,000
|
|
·
|
Plaintiffs
Attorneys Fees - $67,846.89
|
|
·
|
4/10/2017
– Preferred Stock Series B deemed null and void. This series was issued without
proper Shareholder approval and notification.
|
|
·
|
4/10/2017
– Preferred Stock Series C deemed null and void. This series was issued without
proper Shareholder approval and notification.
|
|
·
|
4/10/2017
– The Series A Preferred Stock held by Clinton Hall, LLC will reflect in subsequent
Financial Statements and was adjudicated in the above referenced lawsuit to be deemed
in full force and effect.
|
|
·
|
5/4/2017
– Joe E. Poe, Jr. was elected in term CEO by a vote of a majority of the Shareholders.
|
|
·
|
6/27/2017
– Creative Edge Nutrition, a Nevada corporation (“CEN”) and Fresh Promise
Foods, Inc., a Nevada corporation (the “Company”) executed an Asset Purchase
Agreement (“Agreement”) whereby the Company purchased the assets and liabilities
of CEN’s subsidiary, “Giddy Up Energy Products, Inc. (“Giddy”).
The Company purchased Giddy’s assets and liabilities in exchange for 4,719,760,108
shares shares of the Company’s common stock.
|
|
·
|
1/24/2018
– The Company has completed the distribution of its common shares to the CEN shareholders
in order to consummate the acquisition of Giddy. Pursuant to the Agreement, the Company
is in the process of spinning out its existing assets and liabilities and assuming Giddy’s
business plan involving nutritional supplements and energy drinks focusing on an active
lifestyle.
|
|
·
|
4/2/2018
– Engagement negotiations for a PCOB auditing firm commenced.
|
|
·
|
4/5/2018
– The Issuer is being sued by David G. Wiser, LLC 3145 Lookout Circle, Suite 300.
Cincinnati, OH 42208 for debt acquired from the Asset/Debt purchase of Creative Edge
Nutrition for conversion of his debt when there are no available shares to issue until
the Issue files all of its delinquent filings.
|
Convertible
Debt – See Financials
Issuance
of Common Stock – 8,999,999,998 issued and outstanding. Shares for Convertible Debt have been issued
Litigation
- On March 30, 2017 an order was granted in PART MOTION for Default Judgment entered into in Civil Case 2:13-CV-00448-JAD-9JK
in favor of Plaintiffs. The Plaintiffs MOTION FOR DEFAULT Judgment was granted against Hellwig, Anthus and Stakool/Fresh Promise
jointly and severely by Jennifer A. Dorcey, United States District Court Judge, District of Nevada, as follows:
4/5/2018 – The Issuer is being sued by David G. Wiser, LLC 3145 Lookout Circle, Suite 300. Cincinnati, OH 42208 for
debt acquired from the Asset/Debt purchase of Creative Edge Nutrition for conversion of his debt when there are no available
shares to issue until the Issue files all of its delinquent filings.
|
·
|
Clinton
Hall, LLC - $196,800
|
|
·
|
Richard
Maher - $25,000
|
|
·
|
Plaintiffs
Attorneys Fees - $67,846.89
|
No
other pending legal proceedings.
The financial statements presented have been produced with a reliance on documents received from former management. Current
management is engaging a new auditing team.
These
financials are relied upon numbers given to current management from the former CPA, Mitchell J. Pruzansky, CPA, Pompano Beach,
FloridaAccounting.
Current
management is currently engaging a new auditing team and will revise any and all numbers if needed.
ITEM
2