On April 30, 2013, the Company entered into a loan transaction with an accredited investor for a Promissory Note, payable with interest at
8
% per annum in the amount of $
5,000
, convertible into shares of common stock of the Company at a price of $
0.20
per share. The note is due
twenty four
months from the date of the note, on or before August 31, 2015. Total accrued interest as of June 30, 2014 was $
500
.
On July 30, 2013, the Company entered into a loan transaction with an accredited investor for a Promissory Note, payable with interest at
8
% per annum in the amount of $
5,000
, convertible into shares of common stock of the Company at a price of $
0.20
per share. The note is due
twenty four
months from the date of the note, on or before July 30, 2015.
No
debt discount was recognized as the conversion price is considered out of the money, therefore
no
discount was necessary. Total accrued interest as of June 30, 2014 was $
361
Convertible Note Payable Related Party
Effective June 7, 2013, the Company executed an amendment to the promissory note originally issued on August 2012 for $
215,000
. The amended transaction involved the extension of the Promissory Note from April 30, 2013 to April 30, 2016, with the creditors waiving any default under the previous note. The Company made interest payments to each of the
eight
note holders for all accrued interest from August 1, 2012 to April 30, 2013 for consideration of the extension. The Company has agreed to make quarterly interest payments to each of the note holders during the term of the extension. All other terms of the previous Promissory Note, Security Agreement and related warrants remain in full force and effect.
On February 26, 2013, the Company executed a promissory note with
one
of our shareholders, for $
65,000
at
15
% interest per annum, secured by
seven
of our sales orders to finance inventory purchases. The promissory note was due on or before April 20, 2013. There is
no
conversion feature associated with this promissory note. A payment of $
20,000
was made against the principal on the note on April 1, 2013. Subsequently the note was extended and made part of the $
95,000
convertible promissory note issued on May 24, 2013 as describe in the 8-K filed on May 24, 2013. The $
95,000
convertible promissory note is for 36 month, due on or before May 24, 2016 and bears and interest rate of
8
% per annum. A total discount of $
21,923
was calculated on May 24, 2013, with $
5,108
amortized in the current year. Total discount amortization for the quarter ending June 30, 2014 is $
1,639
. The note is convertible into common stock at a rate of $
0.0325
per share. This note was subsequently converted.
On August 1, 2012, the Company issued amendments to the convertible note agreements in the aggregated amount of $
215,000
and extended the due date with the repayments in the amount of $
40,000
per quarter to begin April, 2013, and the final payments due in August, 2014, with any remaining balance due at that time. In consideration for extending the due date of the promissory notes, the expiration dates on the warrants issued on March 31, 2011 and June 27, 2011, were amended and extended an additional
three
years, making the new expiration dates August 1, 2017. At the Lenders sole option, Lenders may elect to receive payment of their respective note and all accrued interest in restricted common stock of the Borrower at the price per share of said common stock at same rate as the warrants. Subsequently and effective June 7, 2013, we executed an amendment to the loan transaction. The amended transaction involved the extension of the Promissory Note from April 30, 2013 to April 30, 2016, with the creditors waiving any default under the previous note. The company made interest payments to each of the
eight
note holders for all accrued interest from August 1, 2012 to April 30, 2013 for consideration of the extension. On the fourth extension, all accrued interest was combined with the original principle amount as of July 31, 2012. The company has agreed to make quarterly interest payments to each of the note holders during the term of the extension. All other terms of the previous Promissory Note, Security Agreement and related warrants remain in full force and effect. As of June 30, 2014, the ending principle balance was $
243,745
, including the related party convertible note balance of $
34,011
noted below. Interest accrued as of March 31, 2014 for the total set of notes was $
17,796
For the transactions described above in regard to the original $
215,000
convertible notes, $
34,011
was loaned from a related party and has been separated out as described in the Companys financial statements and accompanying notes at March 31, 2013. Interest expense for the related party convertible note with the ending June 30, 2014 principle balance was $
3,087
On February 29, 2012, the Company entered into
three
separate convertible promissory notes in the aggregate amount of $
100,000
. The notes bear interest at
ten
percent (
10
%) per annum and were due on May 30, 2012. At the sole option each respective Lender, the outstanding balance of the notes may be converted into shares of restricted Rule
144
common stock of the Borrower at a price per share of $
0.05
. In the event Lender elects to convert any outstanding balance due under this note into such shares, Lender shall give written notice to the Borrower
seven
(
7
) days prior to the effective date of such exercise. At Borrowers sole option, Borrower may elect to pay Lender in cash up to
one
-half (
1
/
2
) of the then principal and interest due under the note. In such event, the remaining balance of principal and interest shall be converted as provided under the note agreement. On June 14, 2012,
one
of the notes, in the amount of $
50,000
, was converted into
1,028,770
shares of our restricted common stock in accordance with the terms of the convertible promissory note. A second extension was issued for the remaining
two
notes in an aggregate amount of $
50,000
, under the same terms and conditions, with a new maturity date of October 31, 2012. These
two
notes were subsequently extended, with
no
changes to the terms, were due and payable on or before December 31, 2012. The company negotiated a new maturity date with the lender and issued extensions on the
two
convertible promissory notes with due dates of March 31, 2013, which were subsequently extended to June 30, 2013. The company negotiated a new maturity date with the lender and issued extensions on the
two
convertible promissory notes extended to June 30, 2014. On June 30, 2014 the principle balance of the notes remains at $
35,000
and $
15,000
totaling to the $
50,000
. The total accrued interest as of June 30, 2014 was $
11,671
This note was subsequently converted.
On December 3, 2012, the Company entered into a long term convertible promissory note with board member and shareholder in the amount of $
45,000
. The note is convertible into common stock at a rate of $
0.04
per share. The note bears interest at
eight
(
8
%) per annum and is due
36
months from the date of the agreement, on or before December 03, 2015. The proceeds from the note were used by the company to pay off the Security Purchase Agreement (tranche
2
) issued on June 4, 2012, along with any accrued interest, penalties and administrative costs. The debt discount was calculated as $
18,255
, of which $
1,233
was amortized during the twelve months ended March 31, 2013. The debt discount was calculated as $
18,255
, of which $
5,300
was amortized during the twelve months ended March 31, 2014, leaving the discount balance remaining of $
11,722
. An additional $
1,471
discount was amortized in the quarter ending June 30, 2014. Accrued interest as of June 30, 2014 is $
898
. This note was subsequently converted.
On January 11, 2013, the Company entered into an
8
% Convertible Promissory Note with an accredited investor, in the amount of $
21,500
, convertible into shares of common stock of the Company, at the market price of $
0.065
. The note is due
thirty six
months from the date of note. The note is secured by a secondary security interest in all of the Companys intellectual property. The proceeds received by the Company from the sale of this note will be used by the Company for prepaying the Promissory Note dated June 5, 2012 (Tranche
3
) issued to Asher Enterprises, Inc., as well as any administrative costs associated with the payment. This final payment completes and pays off all outstanding notes with Asher Enterprises. The Company recognized a discount on the debt issued related to the derivative liabilityThis debt discount was calculated as $
9,285
, of which $
2,640
was amortized during the twelve months ended March 31, 2014. An additional $
740
discount was amortized in the quarter ending June 30, 2014. Accrued interest as of June 30, 2014 is $
1,286
. This note was subsequently converted.
On September 30, 2013, the Company entered into a long term convertible promissory note with board member and shareholder of an
8
% Convertible Promissory Note in the amount of $
150,000
, convertible into shares of common stock of the Company, at a price of $
0.04
per share, which represents a
50
% discount from the market price as of the date of the note. The note is due
36
months from the date of the note on or before September 30, 2016. The debt discount was calculated as $
150,000
, of which $
18,579
was amortized during the twelve months ended March 31, 2014, leaving the discount balance remaining of $
131,421
. An additional $
2,728
discount was amortized in the quarter ending June 30, 2014. Accrued interest as of June 30, 2014 is $
8,975
. This note was subsequently converted.
On September 30, 2013, the Company entered into a Promissory Note in the amount of $
260,000
with
one
of our board members, payable with interest at
10
% per annum, in cash on or before November 29, 2013. The Promissory Note funded payables and other corporate purposes of borrower. This note is secured by that certain license agreement and other agreements between borrower and Kindle Education, now Creya Learning. A long-term Convertible Promissory Note was executed on January 8, 2014 that replaces the September 30, 2013, payable with interest at
8
% per annum on or before January 8, 2017. The debt discount was calculated as $
156,000
, of which $
22,286
was amortized during the twelve months ended March 31, 2014, leaving the discount balance remaining of $
133,714
. An additional $
1,252
discount was amortized in the quarter ending June 30, 2014. Accrued interest as of June 30, 2014 is $
16,911
. This note was subsequently converted.