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Subsequent Events
9 Months Ended
Sep. 30, 2016
Subsequent Events [Abstract]  
Subsequent Events

Note 13 - Subsequent Events

 

On December 6, 2016, the Company issued a total of $220,002 Convertible Promissory Notes (the “December 2016 Notes”) to three accredited investors. The December 2016 Notes were issued in connection with a loan of $200,002 and the cancellation of two $10,000 promissory notes previously issued by the Company to two of the investors. The December 2016 Notes are due on June 6, 2017 and bear interest at 8% per annum payable on the maturity date. In connection with the investments, the Company agreed to use its best efforts (no later than 90 days from the original issuance date) to obtain shareholder approval to effectuate a reverse stock split or increase its authorized capital (either, a “Charter Amendment”) in order to permit the exercise and/or conversion of all of the Company’s outstanding securities into common stock including securities owed to holders pursuant to anti-dilution protection. Further, the December 2016 Notes required the Company to designate a series of preferred stock with super voting power and issue it to an executive officer of the Company. In furtherance of that provision, the Company issued 100 shares of Series A Preferred Stock to Charles Allen, its Chief Executive Officer and a director, which provides Mr. Allen with a majority of the Company’s outstanding voting power. See Item 5.03 below. Until such time as the Company effects a Charter Amendment, the December 2016 Notes are convertible into a preferred stock which shall be designated and issued by the Company and a Certificate of Designation designating the related rights and preferences of the preferred stock shall be filed with the Secretary of State of Nevada within 15 days of the investment. After the Charter Amendment is effected, the December 2016 Notes will be convertible into Common Stock. The conversion price of the December 2016 Notes is $0.002 per share.

 

The Company may only use the proceeds of the December 2016 Notes for accrued and unpaid management compensation (subject to the $50,000 salary limitation as set forth in the April 20, 2015 Subscription Agreement Amended Agreement), unpaid out-of-pocket expenses of employees, legal and accounting fees, and certain other fees and liabilities. The Company may not use any of the proceeds towards payments to its outstanding note holders or investors that participated in the Company’s past financings.