| 3. | Convertible Debentures
a) | On July 15, 2013, the Company entered into a $27,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and is due on January 16, 2015. The note is convertible into shares of common stock 180 days after the date of issuance (January 11, 2014) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company's common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at March 31, 2015, the Company recorded accrued interest of $873 (December 31, 2014 - $3,077), which has been included in accounts payable and accrued liabilities.
In accordance with ASC 470-20, "Debt with Conversion and Other Options", the Company recognized the intrinsic value of the embedded beneficial conversion feature of $27,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the period ended March 31, 2015, the Company issued 454,000,000 common shares (December 31, 2014 - 23,312,500) for the conversion of $20,040 (December 31, 2014 - $7,460) of this debenture and $2,660 (December 31, 2014 - $nil) of accrued interest. During the period ended March 31, 2015, the Company had amortized $2,260 (December 31, 2014 - $22,461) of the debt discount to interest expense. As at March 31, 2015, the carrying value of the debenture was $nil (December 31, 2014 - $17,780).
On January 11, 2014, the note became convertible resulting in the Company recording a derivative liability of $36,272 with a corresponding adjustment to loss on change in fair value of derivative liabilities. As at March 31, 2015, the Company revalued the derivative liability to its fair value resulting in the Company recording $nil (December 31, 2014 - $23,331) as a gain on change in fair value of derivative liabilities. As at March 31, 2015, the fair value of the derivative liability was $nil (December 31, 2014 - $3,061). Refer to Note 4.
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b) | On October 4, 2013, the Company entered into a $32,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and is due on July 8, 2015. The note is convertible into shares of common stock 180 days after the date of issuance (April 2, 2014) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company's common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at March 31, 2015, the Company recorded accrued interest of $3,868 (December 31, 2014 - $3,227), which has been included in accounts payable and accrued liabilities.
In accordance with ASC 470-20, "Debt with Conversion and Other Options", the Company recognized the intrinsic value of the embedded beneficial conversion feature of $32,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the period ended March 31, 2015, the Company issued 174,000,000 common shares (December 31, 2014 - nil) for the conversion of $8,700 (December 31, 2014 - $nil) of this debenture. During the period ended March 31, 2015, the Company had amortized $10,339 (December 31, 2014 - $10,123) of the debt discount to interest expense. As at March 31, 2015, the carrying value of the debenture was $13,380 (December 31, 2014 - $11,741).
On April 2, 2014, the note became convertible resulting in the Company recording a derivative liability of $47,794 with a corresponding adjustment to loss on change in fair value of derivative liabilities. As at March 31, 2015, the Company revalued the derivative liability to its fair value resulting in the Company recording $18,600 (December 31, 2014 - $2,882 gain) as a loss on change in fair value of derivative liabilities. As at March 31, 2015, the fair value of the derivative liability was $35,615 (December 31, 2014 - $44,912). Refer to Note 4.
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c)a) | On February 18, 2014, the Company entered into a $15,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and is due on August 20, 2015. The note is convertible into shares of common stock 180 days after the date of issuance (August 17, 2014) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company's common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at MarchJune 30, 2014, the Company recorded accrued interest of $448 (December, 31, 2013 - |
$nil), which has been included in accounts payable and accrued liabilities. In accordance with ASC 470-20, "Debt with Conversion and Other Options", the Company recognized the intrinsic value of the embedded beneficial conversion feature of $15,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the period ended September 30, 2015, the Company had amortized $590 (December, 31, 2014 - $1,038) of the debt discount to interest expense. As at September 30, 2014, the carrying value of the debenture was $590 (December, 31, 2014 - $1,038).
HDS International Corp. (A Development Stage Company) Notes to the Financial Statements (expressed in U.S. dollars)
| 3. | Convertible Debentures (continued) |
| b) | On April 15, 2015, the Company entered into a $100,000 convertible debenture with a non-related party. During the quarter ended June 30, 2015 The Company received the first $50,000 payment. The remaining $50,000 payment will be made at the request of the borrower. No additional payments have been made as of June 30, 2015. Under the terms of the debenture, the amount is unsecured, bears interest at 10% per annum, and is due on October 16, 2016. The note is convertible into shares of common stock any time after the maturity date at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company's common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at September 30, 2015, the Company recorded accrued interest of $1,379$1,041 (December, 31, 2014 - $1,074)$0), which has been included in accounts payable and accrued liabilities. In accordance with ASC 470-20, "Debt with Conversion and Other Options", the Company recognized the intrinsic value of the embedded beneficial conversion feature of $15,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the period ended March 31, 2015, the Company had amortized $2,453 (December 31, 2014 - $2,431) of the debt discount to interest expense. As at March 31, 2015, the carrying value of the debenture was $4,884 (December 31, 2014 - $2,431).
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| c) | On April 1, 2015, we entered into a transaction with Iconic Holdings, LLC (the "Purchaser"), whereby Iconic Holdings agreed to provide up to $600,000 through a structured convertible promissory note (the "Note"), with funds to be received in tranches. The note bears interest of 10% and is due April 1, 2016. The initial proceeds of $40,000 was received on April 9, 2015, with $30,000 remitted and delivered to us, $4,000 retained by the Purchaser as an original issue discount, and $6,000 retained by the Purchaser for legal expenses. |
The Purchaser has the right to convert the outstanding principal amount and interest under the Note in whole or in part into shares of common stock at a price equal to 50% of the average of the lowest three end of day closing prices of the Company's common stock during the 25 consecutive trading days prior to the date on which Holder elects to convert all or part of the Note. The Note may be prepaid according to the following schedule: Between 1 and 90 days from the date of execution, the Note may be prepaid for 135% of face value plus accrued interest. Between 91 and 180 days from the date of execution, the Note may be prepaid for 145% of face value plus accrued interest. After 180 days from the date of execution until the Due Date, the Note may not be prepaid without written consent from the Purchaser.
| d) | On April 1, 2015, we consented to the further assignment of the February 18, 2014 and the October 4, 2013 Asher Notes, which were initially assigned to JABRO. The April 8, 2015 assignment assigned the notes to the Purchaser. According to the terms of the April 8, 2015 assignment agreement, the February 18, 2014 note was sold to the Purchaser and simultaneously exchanged for a new note (the "New February Note"). In accordance with the exchange, The New February Note was deemed to have been issued February 18, 2014, and carried substantially the same terms as the original note, with the following exceptions: the New February Note bears 0% interest, and the overall ownership of the Purchaser at any one moment shall be limited to 9.99% of the issued and outstanding shares of our common stock. |
HDS International Corp. (A Development Stage Company) Notes to the Consolidated Financial Statements (expressed in U.S. dollars) (unaudited)
3.Convertible Debentures (continued)
| 4. | On August 17, 2014, the note became convertible resulting in the Company recording a derivative liability of $21,750 with a corresponding adjustment to loss on change in fair value of derivative liabilities. As at March 31, 2015, the Company revalued the derivative liability to its fair value resulting in the Company recording $6,789 (December 31, 2014 - $1,038 gain) as a loss on change in fair value of derivative liabilities. As at March 31, 2015, the fair value of the derivative liability was $20,802 (December 31, 2014 - $20,712). Refer to Note 4.Derivative Liabilities |
4.Derivative Liabilities
The Company records the fair value of the of the conversion price of the convertible debentures disclosed in Notes 3(a) and 3(b) in accordance with ASC 815, Derivatives and Hedging. The fair value of the derivative was calculated using a multi-nominal lattice model performed by an independent qualified business valuator. The fair value of the derivative liability is revalued on each balance sheet date with corresponding gains and losses recorded in the consolidated statement of operations. During the period ended March 31,June 30, 2015, the Company recorded a loss on the change in fair value of derivative liability of $25,389 (December$ 32,630 ( December, 31, 2014 - $78,680). ). As at March 31,June 30, 2015, the Company recorded a derivative liability of $56,417 ( December, 31, 2014 - $70,290)$70,290).
The following inputs and assumptions were used to value the convertible debentures outstanding during the periodsperiod ended March 31,June 30, 2015 and December 31, 2014:
·a) | The underlying stock price of $0.0001 to $0.0006$0.0014 was used as the fair value of the common stock as at December 31, 2014. |
·b) | The underlying stock price of $0.0005 to $0.0011$0.0013 was used as the fair value of the common stock as at March 31,June 30, 2015. |
·c) | The principal of the debenture on the July 15, 2013 date of issuance was $27,500. |
· | The balance of the principal and interest of the July 15, 2013 debenture on January 11, 2014, the date the debenture became convertible, was $28,579. |
· | The balance of the principal and interest of the July 15, 2013 debenture on December 31, 2014 was $23,117. |
· | The balance of the principal and interest of the July 15, 2013 debenture on March 31, 2015 was $873. |
· | The principal of the debenture on the October 4, 2013 date of issuance was $32,500. |
· | The balance of the principal and interest of the October 4, 2013 debenture on April 2, 2014, the date the debenture became convertible, was $33,782. |
· | The balance of the principal and interest of the October 4, 2013 debenture on December 31, 2014 was $35,727. |
· | The balance of the principal and interest of the October 4, 2013 debenture on March 31, 2015 was $27,668. |
· | The principal of the debenture on the February 18, 2014 date of issuance was $15,500. |
· | The balance of the principal and interest of the February 18, 2014 debenture on August 17, 2014, the date the debenture became convertible, was $16,112. |
· | The balance of the principal and interest of the February 18, 2014 debenture on December 31, 2014 was $16,574. |
· | The balance of the principal and interest of the February 18, 2014 debenture on March 31, 2015 was $16,879. |
· | Capital raising events are not a factor for the debenture. |
· | The debt holderHolder would redeem based on availability of alternative financing 0% of the time increasing 1.0% monthly to a maximum of 10%. |
·d) | The debt holderHolder would automatically convert the note at maturity if the registration (after 120 days) was effective and the Company is not in default. |
·e) | The projected annual volatility for each valuation period was based on the historic volatility of the Company of 176% as at December 31, 2013, 175% as at January 11, 2014, 176% as at June 30, 2014, 176% as at August 17, 2014, 170% as at September 30, 2014, 2014, 166% as at October 26, 2014, 168% as at December 2, 2014, 170% as at December 4, 2014, 172% as at December 9, 2014, 183% as at December 31, 2014, 203% as at February 6, 2015, 206% as at February 10, 2015, 209% as at February 13, 2015, 212% as at February 18, 2015, 216% as at February 23, 2015, 222% as at March 2, 2015, 223% as at March 3, 2015, 238% as at March 16, 2015, 240% as at March 17, 2015, 244% as at March 19, 2015, 249% as at March 24, 2015, 251% as at March 25, 2015, and 259% as at March 31, 2015. |
·f) | An event of default would occur 0% of the time, increasing to 1.0% per month to a maximum of 5%. To date, the debenture is not in default nor converted by the debt holder.Holder. |
HDS International Corp.
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
(unaudited)
4.Derivative Liabilities (continued)
A summary of the activity of the derivative liability is shown below:
| | | $ | | Balance, December 31, 2013 | | | 45,521 | | Derivative loss due to new issuances | | | 105,816 | | Adjustment for conversion | | | (59,911 | ) | Mark to market adjustment | | | (27,136 | ) | Balance, December 31, 2014 | | | 70,290 | | Adjustment for conversion | | | (39,262 | ) | Mark to market adjustment | | | 25,389 | | Balance, March 31, 2015| Balance, December 31, 2013 | | $ | 45,521 | | | Derivative loss due to new issuances | | | 105,816 | | | Adjustment for conversion | | | (59,911 | ) | | Mark to market adjustment | | | (27,136 | ) | | Balance, December 31, 2014 | | | 70,290 | | | Adjustment for conversion | | | (64,767 | ) | | Mark to market adjustment | | | 50,894 | | | Balance, September 30, 2015 | | $ | 56,417 | |
HDS International Corp. (A Development Stage Company) Notes to the Financial Statements (expressed in U.S. dollars) | | | 56,417 | |
| a) | On March 5, 2015, the Company issued 200,000,000 common shares with a par value of $200,000 pursuant to a license agreement with a third party to acquire the rights to technologies related to emergency management and communications. As the transaction resulted in a change of control, the par value of the license was allocated to additional paid-in capital. As a result of the completion of the transaction, SirenGPS and Paul Rauner are deemed related parties. |
| b) | On March 5, 2015, the Company issued 106,050,000 common shares with a fair value of $21,210 for the settlement of accounts payable of $733,500 owing to consultants resulting in a gain on settlement of debt of $712,290. As the transaction was pursuant to the agreement which resulted in a change of control, the gain has been recorded to additional paid-in capital. |
| c) | On March 5, 2015, the Company issued 342,150,496 common shares with a fair value of $68,430 for the settlement of $300,000 of principal and $107,479 of accrued interest owing to a company controlled by the former President and CEO of the Company. The transaction resulted in a gain on settlement of debt of $339,049 which was recorded against additional paid-in capital. Refer to Note 7(a)7 (a). |
| d) | On March 5, 2015, the Company issued 74,235,000 common shares with a fair value of $14,847 for the settlement of $215,225 owing to the former President and CEO and companies under his control. The transaction resulted in a gain on settlement of debt of $200,378 which was recorded against additional paid-in capital. Refer to Notes 7 and 8. |
| e) | During the period ended March 31, 2015, the Company issued 454,000,000 common shares for the conversion of $20,040 of principal and $2,660 of accrued interest of the July 15, 2013 convertible debenture. As the conversions were within the terms of the agreement, no additional gain or loss was recognized as a result of the conversion. |
| f) | During the period ended March 31, 2015, the Company issued 174,000,000 common shares for the conversion of $8,700 of principal of the October 4, 2013 convertible debenture. As the conversions were within the terms of the agreement, no additional gain or loss was recognized as a result of the conversion. |
6.Preferred Stock| g) | During the period ended June 30, 2015 the Company issued 495,290,000 common shares for the conversion of $25,505 of Principal and interest of the February convertible debenture. As the conversions were within the terms of the agreement, no additional gain or loss was recognized as a result of the conversion. |
On March 5, 2015, the Company issued 13,624,300 Class B preferred stock with a par value of $13,624 pursuant to a license agreement with a third party to acquire the rights to technologies related to emergency management and communications. As the transaction resulted in a change of control, the par value of the license was allocated to additional paid-in capital. As a result of the completion of the transaction, SirenGPS and Paul Rauner are deemed related parties. Each Class B preferred stock is convertible into common stock of the Company at a rate of 200 shares of common stock per each Class B preferred stock.| h) | On April 3, 2015, SirenGPS, Inc., and Hillwinds Ocean Energy, LLC, agreed to convert 200,000,000 shares of common stock, and 222,000,000 shares of common stock owned by them into 1,050,000 shares of Class B Preferred Stock, and 1,165,000 shares of Class B Preferred Stock, respectively, in order to facilitate the closing of the other transactions herein described. |
7.Related Party Transactions
| a) | On March 5, 2015, the Company issued 13,624,300 Class B preferred stock with a par value of $13,624 pursuant to a license agreement with a third party to acquire the rights to technologies related to emergency management and communications. As the transaction resulted in a change of control, the par value of the license was allocated to additional paid-in capital. As a result of the completion of the transaction, SirenGPS and Paul Rauner are deemed related parties. Each Class B preferred stock is convertible into common stock of the Company at a rate of 200 shares of common stock per each Class B preferred stock. |
| b) | On April 3, 2015, The Company issued 2,215,000 shares of Class B Preferred Stock, see Note 5 (h) above. |
HDS International Corp. (A Development Stage Company) Notes to the Consolidated Financial Statements (expressed in U.S. dollars)
| 7. | Related Party Transactions |
| a) | As at March 31,September 30, 2015, the Company owes $570 (December 31, 2014 – $nil)$0) to the President and CEO of the Company for reimbursement of expenses which has been included in accounts payable and accrued liabilities – related parties. The amount owing is unsecured, non-interest bearing, and due on demand. |
HDS International Corp.
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
(unaudited)
7.Related Party Transactions (continued)
| b) | As at March 31,September 30, 2015, the Company owes $19,544$6,100 (December 31, 2014 – $7,518)$0) to the former President and CEO of the Company for reimbursement of expenses which has been included in accounts payable and accrued liabilities – related parties. The amount owing is unsecured, non-interest bearing, and due on demand. |
8. Subsequent Events
| a) | On December 3, 2015, the Company launched a private placement of Series B shares to raise monies in order to close the asset purchase agreement signed with CMG Holdings Group, Inc.’s majority-owned subsidiary Good Gaming, Inc. announced the prior month. A minimum threshold of $300,000 was required under the agreement as a condition to close. That threshold was not reached by year-end 2015, though commitments for a substantial portion of the round were received on or around December 22, 2015. |
| b) | On November 15, 2015, entered an asset purchase agreement signed with CMG Holdings Group, Inc. to purchase the assets of Good Gaming, Inc. The assets purchase agreement was not closed until February of 2016 due to not meeting the threshold mentioned above.. |
| c) | As at March 31, 2015, the Company owes $nil (December 31, 2014 - $300,000) toOn or around February 18, 2016, a company controlled by former officers and directorsspecial meeting of the Company. The amount owing is unsecured, bears interest at 10% per annum, and is due on demand. As at March 31, 2015, the Company has recorded accrued interest of $nil (December 31, 2014 - $102,219) which has been included in accounts payable and accrued liabilities – related parties. During the period ended March 31, 2015, the Company issued 342,150,496 common shares to settle the amounts owing. Refer to Note 5(c). |
d) | As at March 31, 2015, the Company owes $nil (December 31, 2014 - $15,225) to companies under common control by former officers and directors of the Company which has been included in accounts payable and accrued liabilities – related parties. The amounts owing are unsecured, non-interest bearing, and due on demand. During the period ended March 31, 2015, the Company issued 5,251,378 common shares to settle the amounts owing. Refer to Note 5(d). |
e) | During the period ended March 31, 2015, the Company has incurred $20,000 (December 31, 2014 - $120,000) to the former President and CEO of the Company for consulting services. As at March 31, 2015, the Company recorded a related party accounts payable of $nil (December 31, 2014 - $180,000), which has been included in accounts payable and accrued liabilities – related party. The amounts owing are unsecured, non-interest bearing, and due on demand. During the period ended March 31, 2015, the Company issued 68,983,622 common shares to settle the amount owing. Refer to Notes 5(d) and 8(c). |
8.Commitments
a) | On October 12, 2011, the Company entered into a verbal consulting agreement with a non-related party whereby the Company will pay a monthly consulting fee for services provided in the amounts of $3,000. The agreement is for a one month term automatically renewing in each successive month unless earlier terminated. On July 18, 2012, the Board of Directors reviewed the consulting agreement and authorized an increase to the monthly consulting fee from $3,000 to $3,750 per month beginning July 2012. On October 1, 2012, the Board of Directors reviewed the consulting agreement and adjusted the consulting fee from $3,750 to $3,000 per month beginning October 2012. On April 8, 2014, The Board of Directors reviewed the consulting agreement and adjusted the consulting fee from $3,000 to $500 per month effective January 1, 2014. On March 5, 2015, the Company entered into a Settlement and Mutual Release Agreement whereby the parties agreed to terminate the consulting agreement and settle all amounts owing under the consulting agreement.
During the period ended March 31, 2015, the Company incurred $1,000 (December 31, 2014 - $6,000) in consulting fees relating to this agreement, of which $nil (December 31, 2014- $48,000) has been recorded in accounts payable and accrued liabilities as at March 31, 2015. During the period ended March 31, 2015, the Company issued 31,815,000 common shares to settle the amount owing of $49,000. Refer to Note 5(b).
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b) | On October 12, 2011, the Company entered into a consulting agreement with a non-related party whereby the Company will pay a monthly consulting fee for services provided in the amounts of $27,500. The agreement is for a one month term automatically renewing in each successive month unless earlier terminated. On April 8, 2014, The Board of Directors reviewed the consulting agreement and adjusted the consulting fee from $27,500 to $21,500 per month effective January 1, 2014. On March 5, 2015, the Company entered into a Settlement and Mutual Release Agreement whereby the parties agreed to terminate the consulting agreement and settle all amounts owing under the consulting agreement.
During the period ended March 31, 2015, the Company incurred $43,000 (December 31, 2014 - $258,000) in consulting fees relating to this agreement, of which $nil (December 31, 2014 - $641,500) has been recorded in accounts payable and accrued liabilities as at March 31, 2015. During the period ended March 31, 2015, the Company issued 74,235,000 common shares to settle the amount owing of $684,500. Refer to Note 5(b).
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HDS International Corp.
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
(unaudited)
8.Commitments (continued)
c) | On October 12, 2011, the Company entered into a consulting agreement with the former President and CEO of the Company whereby the Company will pay a monthly consulting fee for services provided in the amounts of $3,000. The agreement is for a one month term automatically renewing in each successive month unless earlier terminated. On June 10, 2012, the Board of Directors authorized an increase to the monthly consulting fee from $3,000 to $6,000 per month beginning June 2012. On July 18, 2012, the Board of Directors reviewed the consulting agreement and adjusted the monthly consulting fee to $3,750 beginning July 2012. On April 8, 2014, The Board of Directors reviewed the consulting agreement and adjusted the consulting fee from $3,750 to $10,000 per month effective January 1, 2014. On March 5, 2015, the Company entered into a Settlement and Mutual Release Agreement whereby the parties agreed to terminate the consulting agreement and settle all amounts owing under the consulting agreement.
During the period ended March 31, 2015, the Company incurred $20,000 (December 31, 2014 - $120,000) in consulting fees relating to this agreement, of which $nil (December 31, 2014 - $180,000) has been recorded in accounts payable and accrued liabilities – related parties as at March 31, 2015. During the period ended March 31, 2015, the Company issued 68,983,622 common shares to settle the amount owing of $200,000. Refer to Notes 5(d) and 7(e).
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d) | On January 2, 2013, the Company entered into a consulting agreement with The Holden Group, LLC ("Holden") whereby the Company paid Holden $2,000 and issued 600,000 restricted common shares of the Company upon the execution of the agreement as well as pay $500 on each of the first, second and third month anniversaries of the agreement. These final three payments have been accrued and recorded in accounts payable and accrued liabilities. |
9.Subsequent Events
a) | On April 1, 2015, the Company issued a draw-down convertible promissory note to a non-related party in the principal amount of up to $600,000 (The April 1, 2015 Debenture). Under the terms of the promissory note, the amount is unsecured, bears interest at 10% per annum, and is due on April 1, 2016. The note is convertible into shares of common stock at a conversion rate of 50% of the average of the three lowest end-of-day closing prices of the Company's common stock for the twenty-five trading days prior to the date the holder elects to convert all or part of the promissory note. |
b) | On April 1, 2015, the Company consented to the assignment of the February 18, 2014 and the October 4, 2013 convertible debentures. According to the terms of the assignment agreement, the February 18, 2014 note was sold to the purchaser and simultaneously exchanged for a new note (the "New February Note"). In accordance with the exchange, The New February Note was deemed to have been issued February 18, 2014, and carried substantially the same terms as the original note, with the following exceptions: the New February bears 0% interest, and the overall ownership of the purchaser at any one moment shall be limited to 9.99% of the issued and outstanding shares of our common stock. The purchaser also entered into an agreement with original debenture holder, granting the purchaser the exclusive right to acquire the October 4, 2013 note, on or before May 7, 2015. |
c) | On April 2, 2015, the Company entered into an equity line of credit (ELOC) up to $4,000,000 with a non-related party, which allows the Company to "put" shares to the debtor at a 20% discount to the lowest trading price over the five consecutive trading days immediately succeeding the applicable Put Notice Date. The ELOC requires the filing of a registration statement prior to the funds becoming available to the Company. Once the registration is filed, funding under the ELOC occurs at the discretion of the Company. The minimum amount of the Put Notice is restricted to $5,000 and the maximum to 100% of the average of the daily trading dollar volume for the ten consecutive trading days immediately prior to the Put Notice Date but not to exceed an accumulated amount per month of $150,000 unless prior approval is obtained. |
d) | On April 3, 2015, two shareholders of the Company agreedwas called to convert 422,000,000 shares of common stock into 2,215,500 shares of Class B Preferred Stock atchange the requestname of the Company to facilitate“Good Gaming, Inc.” The Company subsequently effected the closingname change with the Secretary of State of Nevada and has submitted an application to FINRA for a name change and ticker change, both of which are pending with a requirement that the Company bring its SEC filings current. |
| d) | On or around February 18, 2016, a minimum funding threshold had been achieved by CMG on behalf of the other transactions herein described. Good Gaming transaction. Therefore, CMG sold Good Gaming’s assets including intellectual property, software code, computer equipment, brand name and trademarks to the Company. |
| e) | On April 6, 2015,or around February 18, 2016, the Company entered intoexecuted a Common Stock Purchase Warrantsettlement agreement with a non-related party providing the holder the rightlender which lowered their amounts due from approximately $100,000 to purchase shares of common stock of the Company by investing up to $50,000 into new shares of common stock at a price of $0.001 per share for a period of five years. This warrant agreement was negotiated$25,000 and fixed its conversion price. Additionally, as part of the draw-down convertible promissory noteagreement, the lender funded $100,000 new monies to the Company. Separately, management has negotiated the purchase of a second lender’s debt for $50,000 and aims to consummate that transaction as described in Note 9(a). soon as possible. |
HDS International Corp.
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
(unaudited)
9.Subsequent Events (continued)| f) | On April 9, 2015, the Company received $40,000 under the April 1, 2015 Debentureor around February 18, 2016, management terminated plans to use a previously filed form 14C to effectuate a share increase to 10 billion, a reverse split of 1-30, and applied the proceeds to fund operating expenses.approve 50 billion share stock option plan. |
| g) | On April 10, 2015,or around February 18, 2016, Paul Rauner resigned his positions of CEO and Director. Additionally, a special meeting of the shareholders of the Company issued 149,844,444 common shares uponwas called, at which time they appointed Vikram Grover to the issuance of $6,743 of principal of the February 18, 2014 convertible debenture. Refer to Note 3(c).same positions. |
| h) | On April 15, 2015,or around February 22, 2016, a special meeting of the shareholders of the Company entered into a draw-down convertible promissory notewas called to a non-related party inappoint Barbara Laken and David Dorwart to the principal amountBoard of upDirectors and to $100,000 (the April 15, 2015 Debenture). Underappoint Barbara Laken as the terms of the debenture, the amount is unsecured, bears interest at 10% per annum, and is due on October 15, 2016. The note is convertible into shares of common stock after the maturity date at a conversion rate of 50% of the average of the three lowest closing bid prices of the Company's common stock for the twenty trading days ending on the trading day the conversion notice is received by the Company. |
i) | On April 15, 2015, the Company issued 100,000 warrants to a non-related party. Each warrant entitles the holder to purchase one share of common stock at $0.001 per share until April 15, 2020. The warrants are subject to a cashless conversion feature at the election of the holder.Company’s Corporate Secretary. |
j) | On April 16, 2015, the Company received $50,000 under the April 15, 2015 Debenture and applied the proceeds to fund operating expenses. |
k) | On April 22, 2015, the Company received $20,000 under the April 1, 2015 Debenture and applied the proceeds to fund operating expenses. |
14
l) | On April 23, 2015, the Company issued 164,977,778 common shares for the conversion of $7,424 of principal of the February 18, 2014 convertible debenture. Refer to Note 3(c). |
m) | On May 7, 2015, Under the April 1, 2015 agreement the purchaser exercised the option to purchase the October 4, 2013 debenture on May 7, 2015. According to the terms of the assignment agreement, the October 4, 2013 note was sold to the purchaser and simultaneously exchanged for a new note (the "New October Note"). In accordance with the exchange, The New October Note was deemed to have been issued October 4, 2013, and carried substantially the same terms as the original note, with the following exceptions: the New October Note bears 0% interest, and the overall ownership of the purchaser at any one moment shall be limited to 9.99% of the issued and outstanding shares of our common stock. |
ITEM 2. | ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION. |
Forward Looking Statements
This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-lookingforward- looking statements for any reason.
We are considered a start-up corporation. Our auditors have issued a going concern opinion onin the financial statements for the year ended December 31, 2014.
RESULTS OF OPERATIONS
Working Capital
| | | | September 30, | | | December 31, | | | | | | 2015 | | | 2014 | | | | | March 31, 2015 $ | | | December 31, 2014 $ | | | | | | | | | Current Assets | | | 515 | | | | 1,093 | | | $ | - | | | $ | 1,093 | | | Current Liabilities | | | 138,053 | | | | 1,435,785 | | | | 272,306 | | | | 1,435,785 | | | Working Capital Deficit | | | (137,538 | ) | | | (1,434,692 | ) | | | Working Capital (Deficit) | | | | (272,306 | ) | | | (1,434,692 | ) |
Cash Flows | | | September 30, | | | September 30, | | | | | 2015 | | | 2014 | | | | | | | | | | | Cash Flows from (used in) Operating Activities | | $ | (73 | ) | | $ | (12,759 | ) | | Cash Flows from (used in) Financing Activities | | | - | | | | 16.000 | | | Net Increase (decrease) in Cash During Period | | | (73 | ) | | | 3,441 | |
| | | March 31, 2015 $ | | | March 31, 2014 $ | | | Cash Flows used in Operating Activities | | | (73 | ) | | | (12,759 | ) | | Cash Flows from Financing Activities | | | – | | | | 16,200 | | | Net Decrease in Cash During Period | | | (73 | ) | | | 3,441 | |
Operating Revenues
We have not generated any revenues since inception.
Operating Expenses and Net Loss
Operating expenses for the three months ended March 31,September 30, 2015 were $81,494$0 compared with $108,860$101,230 for the three months ended March 31,September 30, 2014. The decrease in operating expenses was attributed to a decrease in consulting fees of $26,165$96,000, and professional fees of $7,850,$5,060 and a decrease in general and administrative fees of $170 for day-to-day operating costs. For the nine months ended September 30, 2015 the Company incurred operating expenses of $272,119 compared with $317,416 for the nine months ended September 30, 2014. The decrease in operating expenses was attributed to a decrease in consulting fees of $189,306 and transfer agent fees of $20 offset by an increase in general and administrative fees of $6,649 for day-to-day operating costs. The decrease to consulting$125,069 and Professional fees is a result of the Company entering into settlement and mutual release agreements with three consultants at the beginning of March resulting in the termination of the consulting agreements compared to these consultants receiving a full three months of fees during the period ended March 31, 2014.$18,960.
During the threenine months ended March 31,September 30, 2015, the Company recorded a net loss of $129,713$339,986 compared with a net loss of $170,989$467,292 for the threenine months ended March 31,September 30, 2014. In addition to the above, the Company incurred an increase of $5,453$35,237 of interest expense relating to debt balances offset by a decrease of $19,363and $32,630 for loss on the change in fair value of derivatively liabilities. The increase in interest expense is a result of the Company accreting the debt discount relating to the convertible debentures held. The decrease in the loss on the change in fair value of the derivative liabilities relates to the fact that the Company has converted $68,700 of the $108,000 convertible debentures outstanding as at March 31, 2014 leaving a balance of $39,300 as at March 31, 2015.
Liquidity and Capital Resources
As at March 31,September 30, 2015, the Company's cash balance was $nil$0 compared to cash balance of $73 as at December 31, 2014. As at March 31,June 30, 2015, the Company's total assets were $515$0 compared to total assets of $1,093 as at December 31, 2014. The decrease in the cash balance and total assets was attributed to the decreaseuse of cash of $73 and a decrease of deferred financing costs of $505.for operations.
As at March 31,September 30, 2015, the Company had total liabilities of $138,053$322,306 compared with total liabilities of $1,435,785 as at December 31, 2014. The decrease in total liabilities is attributed to a decrease of account payable and accrued liabilities of $970,176, $685,328$916,918, $634,362 of which pertained to trade accounts payable and $284,848$298,292 pertained to related party accounts payable and accrued liabilities as well as a decreasean increase in due to related parties of $300,000, convertible debentures of $13,688$165,000 and a decrease in derivative liabilities of $13,873. The decrease in accounts payable and accrued liabilities and due to related parties was the result of the Company issuing 522,435,496 common shares for the settlement of $733,500 of accounts payable and accrued liabilities, $322,704 of accounts payable and accrued liabilities – related parties, and $300,000 of due to related parties. The decrease in both the convertible debentures and derivative liability is the result of the Company converting $68,700 of the $108,000 convertible debentures outstanding as at March 31, 2014 leaving a balance of $39,300 as at March 31, 2015.
As at March 31,September 30, 2015, the Company has a working capital deficit of $137,538 $272,306 compared with working capital deficit of $1,434,692 at December 31, 2014 with the decrease in the working capital deficit attributed to the decreases in accounts payable and accrued liabilities, due to related parties, convertible debentures and derivative liabilities during the period as discussed above.
Cashflow from Operating Activities
During the threenine months ended March 31,September 30, 2015, the Company used $73$165,073 of cash for operating activities compared to the use of $12,759$28,176 of cash for operating activities during the threenine months ended March 31,September 30, 2014. The decrease in the level of cash used for operating activities was due to the increase in non-cash accretion of debt discount, amortization of intangible assets, offset by an decrease in non-cash amortization ofand deferred financing costs and loss on change in fair value of derivative liability as well as the change in the level of accounts payable and accrued liabilities – related parties.parties offset by an increase in net loss as well as the change in the level of accounts payable and accrued liabilities.
Cashflow from Financing Activities
During the threenine months ended March 31,September 30, 2015, the Company received $nil$165,000 of proceeds from financing activities compared to $16,200$24,968 during the threenine months ended March 31, 2014. The decrease in proceeds from financing activities was due to the Company receiving proceeds of $15,000 for the issuance of a convertible debenture and $1,200 from a related party during the three months ended March 31, 2014 compared to $nil received during the three months ended March 31,September 30, 2015.
Subsequent Developments
On April 1, 2015, the Company issued a draw-down convertible promissory note to a non-related party in the principal amount of up to $600,000. Under the terms of the promissory note, the amount is unsecured, bears interest at 10% per annum, and is due on April 1, 2016. The note is convertible into shares of common stock at a conversion rate of 50% of the average of the three lowest end-of-day closing prices of the Company's common stock for the twenty-five trading days prior to the date the holder elects to convert all or part of the promissory note.
On April 1, 2015, the Company consented to the assignment of the February 18, 2014 and the October 4, 2013 convertible debentures. According to the terms of the assignment agreement, the February 18, 2014 note was sold to the purchaser and simultaneously exchanged for a new note (the "New February Note"). In accordance with the exchange, The New February Note was deemed to have been issued February 18, 2014, and carried substantially the same terms as the original note, with the following exceptions: the New February bears 0% interest, and the overall ownership of the purchaser at any one moment shall be limited to 9.99% of the issued and outstanding shares of our common stock. The purchaser also entered into an agreement with original debenture holder, granting the purchaser the exclusive right to acquire the October 4, 2013 note, on or before May 7, 2015.
On April 2, 2015, the Company entered into an equity line of credit (ELOC) up to $4,000,000 with a non-related party, which allows the Company to "put" shares to the debtor at a 20% discount to the lowest trading price over the five consecutive trading days immediately succeeding the applicable Put Notice Date. The ELOC requires the filing of a registration statement prior to the funds becoming available to the Company. Once the registration is filed, funding under the ELOC occurs at the discretion of the Company. The minimum amount of the Put Notice is restricted to $5,000 and the maximum to 100% of the average of the daily trading dollar volume for the ten consecutive trading days immediately prior to the Put Notice Date but not to exceed an accumulated amount per month of $150,000 unless prior approval is obtained.
None
On April 3, 2015, two shareholders of the Company agreed to convert 422,000,000 shares of common stock into 2,215,500 shares of Class B Preferred Stock at the request of the Company, to facilitate the closing of the other transactions herein described.
On April 6, 2015, the Company entered into a Common Stock Purchase Warrant agreement with a non-related party providing the holder the right to purchase shares of common stock of the Company by investing up to $50,000 into new shares of common stock at a price of $0.001 per share for a period of five years. This warrant agreement was negotiated as part of the draw-down convertible promissory note.
On April 10, 2015, the Company issued 149,844,444 common shares upon the issuance of $6,743 of principal of the February 18, 2014 convertible debenture.
On April 15, 2015, the Company entered into a draw-down convertible promissory note to a non-related party in the principal amount of up to $100,000. Under the terms of the debenture, the amount is unsecured, bears interest at 10% per annum, and is due on October 15, 2016. The note is convertible into shares of common stock after the maturity date at a conversion rate of 50% of the average of the three lowest closing bid prices of the Company's common stock for the twenty trading days ending on the trading day the conversion notice is received by the Company.
On April 15, 2015, the Company issued 100,000 warrants to a non-related party. Each warrant entitles the holder to purchase one share of common stock at $0.001 per share until April 15, 2020. The warrants are subject to a cashless conversion feature at the election of the holder.
On April 23, 2015, the Company issued 164,977,778 common shares for the conversion of $7,424 of principal of the February 18, 2014 convertible debenture.
Going Concern
We have not attained profitable operations and are dependent upon the continued financial support from our shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from our future business. These factors raise substantial doubt regarding our ability to continue as a going concern.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
Future Financings
We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities. We are also exploring equity investment into the preferred shares of the Company.
Critical Accounting Policies
Our consolidated financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.
We regularly evaluate the accounting policies and estimates that we use to prepare our consolidated financial statements. A complete summary of these policies is included in the notes to our consolidated financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.
Recently Issued Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company 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.
ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 4.CONTROLS AND PROCEDURES.
Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that these disclosure controls and procedures are not effective due to the material weaknesses resulting from the Board of Directors not currently having any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Please refer to our Annual Report on Form 10-K as filed with the SEC on April 15, 2015,7, 2014, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.
There were no changes in our internal control over financial reporting during the quarter ended March 31, 2015June 30, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
| Exhibit | | Incorporated by reference | Filed | | Number | Description of Exhibit | Form | Date | Number | herewith | | 3.1 | Articles of Incorporation. | S-1 | 3/24/09 | 3.1 | | | 3.2 | Bylaws. | S-1 | 3/24/09 | 3.2 | | | 3.3 | Amended and Restated Articles of Incorporation. | 8-K | 6/14/11 | 3.1a | | | 3.4 | Amended and Restated Articles of Incorporation. | 8-K | 8/17/11 | 3.1 | | | 10.1 | Management Agreement between the Company and Mr. Mark Simon dated March 23, 2010. | 10-K | 4/07/10 | 10.1 | | | 10.2 | Promissory Note issued to Newton Management Ltd. dated September 28, 2010. | 8-K | 10/08/10 | 10.1 | | | 10.3 | Amended Management Agreement between the Company and Mr. Mark Simon dated October 1, 2010. | 8-K | 11/10/10 | 10.1 | | | 10.4 | Investors Relations Services Agreement with Blue Chip IR dated October 1, 2010. | 10-Q | 11/15/10 | 10.3 | | | 10.5 | Share Exchange Agreement with AmeriSure Pharmaceuticals LLC dated May 13, 2011. | 8-K | 5/16/11 | 10.1 | | | 10.6 | Promissory Note to Amerisure Pharmaceuticals, LLC dated June 20, 2011. | 8-K | 6/29/11 | 10.1 | | | 10.7 | Promissory Note to Serik Enterprises, Inc. | 8-K | 8/12/11 | 10.1 | | | 10.8 | Settlement Agreement with Vail International Ltd. | 8-K | 8/12/11 | 10.2 | | | 10.9 | Settlement Agreement with Newton Management Ltd. | 8-K | 8/12/11 | 10.3 | | | 10.10 | Settlement Agreement with Mark Simon. | 8-K | 8/12/11 | 10.4 | | | 10.11 | Settlement Agreement with Carrillo Huettel, LLC. | 8-K | 8/12/11 | 10.5 | | | 10.12 | Asset Acquisition Agreement. | 8-K | 8/17/11 | 10.1 | | | 10.13 | Promissory Note with Hillwinds Ocean Energy, LLC. | 8-K | 8/17/11 | 10.2 | | | 10.14 | Settlement Agreement and General Mutual Release with Serik Enterprises, Inc. | 10-Q | 11/21/11 | 10.14 | | | 10.15 | Draw Down Convertible Promissory Note. | 10-Q | 11/21/11 | 10.15 | | | 10.16 | Intellectual Property License Agreement with Hillwinds Energy Development Corporation. | 10-K | 4/16/12 | 10.1 | | | 10.17 | Exclusivity and Feasibility Study Agreement with City of Saint John. | 8-K | 12/05/12 | 10.1 | | | 10.18 | Intellectual Property License Agreement with Hillwinds Energy Development Corporation dated December 10, 2012. | 8-K | 12/12/12 | 10.1 | | | 10.19 | Consulting Agreement with The Holden Group. | 8-K | 1/03/13 | 10.1 | | | 10.20 | Restructuring Agreement with Dennis Holden. | 8-K/A | 2/14/13 | 10.1 | | | 10.21 | Restructuring Agreement with Stephen Walker. | 8-K/A | 2/14/13 | 10.2 | | | 10.22 | Restructuring Agreement with Lance Warren. | 8-K/A | 2/14/13 | 10.3 | | | Exchange Agreement with Denali Equity Group, LLC. | 10-Q | 5/20/15 | 10.23 | X | | 14.1 | Code of Ethics. | 10-K | 3/29/11 | 14.1 | | | 21.1 | List of subsidiaries | S-1/A-1 | 1/17/13 | 21.1 | | | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | | | | X | | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | | | | X | | 99.1 | Subscription Agreement. | S-1/A-1 | 1/17/13 | 99.1 | | | 101.INS | XBRL Instance Document. | | | | | | 101.SCH | XBRL Taxonomy Extension – Schema. | | | | | | 101.CAL | XBRL Taxonomy Extension – Calculations. | | | | | | 101.LAB | XBRL Taxonomy Extension – Labels. | | | | | | 101.PRE | XBRL Taxonomy Extension – Presentation. | | | | | | 101.DEF | XBRL Taxonomy Extension – Definition. | | | | |
| | | | | Incorporated by reference | | | Filed | | | Number | | Description of Exhibit | | Form | | Date | | Number | | | herewith | | | | 3.1 | | Articles of Incorporation. | | | S-1 | | 3/24/09 | | | 3.1 | | | | | | | 3.2 | | Bylaws. | | | S-1 | | 3/24/09 | | | 3.2 | | | | | | | 3.3 | | Amended and Restated Articles of Incorporation. | | | 8-K | | 6/14/11 | | | 3.1 | a | | | | | | 3.4 | | Amended and Restated Articles of Incorporation. | | | 8-K | | 8/17/11 | | | 3.1 | | | | | | | 10.1 | | Promissory Note issued to HGT Capital LLC. dated | | | 8-K | | 04/21/1515 | | | 10.1 | | | | | | | | | April 15, 2015. | | | | | | | | | | | | | | | 14.1 | | Code of Ethics. | | | 10-K | | 3/29/11 | | | 14.1 | | | | | | | 21.1 | | List of subsidiaries | | | S-1/A-1 | | 1/17/13 | | | 21.1 | | | | | | | 31.1 | | Certification of Principal Executive Officer and Principal Financial | | | | | | | | | | | | X | | | | | | Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | | | | | | | | | | | | | | | | 32.1 | | Certification of Chief Executive Officer and Chief Financial Officer | | | | | | | | | | | | X | | | | | | pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 101.INS | | XBRL Instance Document. | | | | | | | | | | | | | | | 101.SCH | | XBRL Taxonomy Extension – Schema. | | | | | | | | | | | | | | | 101.CAL | | XBRL Taxonomy Extension – Calculations. | | | | | | | | | | | | | | | 101.LAB | | XBRL Taxonomy Extension – Labels. | | | | | | | | | | | | | | | 101.PRE | | XBRL Taxonomy Extension – Presentation. | | | | | | | | | | | | | | | 101.DEF | | XBRL Taxonomy Extension – Definition. | | | | | | | | | | | | | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities on this 19th3rd day of May, 2015.2016.
| | HDS INTERNATIONAL CORP. | | | (the (the "Registrant") | | | | | | | BY: | PAUL RAUNER
VIKRAM GROVE | | | | Paul Rauner Vikram Grover | | | | President, Principal Executive Officer, | | | Principal Financial Officer and Principal Accounting Officer |
| Exhibit | | Incorporated by reference | Filed | | Number | Description of Exhibit | Form | Date | Number | herewith | | 3.1 | Articles of Incorporation. | S-1 | 3/24/09 | 3.1 | | | 3.2 | Bylaws. | S-1 | 3/24/09 | 3.2 | | | 3.3 | Amended and Restated Articles of Incorporation. | 8-K | 6/14/11 | 3.1a | | | 3.4 | Amended and Restated Articles of Incorporation. | 8-K | 8/17/11 | 3.1 | | | 10.1 | Management Agreement between the Company and Mr. Mark Simon dated March 23, 2010. | 10-K | 4/07/10 | 10.1 | | | 10.2 | Promissory Note issued to Newton Management Ltd. dated September 28, 2010. | 8-K | 10/08/10 | 10.1 | | | 10.3 | Amended Management Agreement between the Company and Mr. Mark Simon dated October 1, 2010. | 8-K | 11/10/10 | 10.1 | | | 10.4 | Investors Relations Services Agreement with Blue Chip IR dated October 1, 2010. | 10-Q | 11/15/10 | 10.3 | | | 10.5 | Share Exchange Agreement with AmeriSure Pharmaceuticals LLC dated May 13, 2011. | 8-K | 5/16/11 | 10.1 | | | 10.6 | Promissory Note to Amerisure Pharmaceuticals, LLC dated June 20, 2011. | 8-K | 6/29/11 | 10.1 | | | 10.7 | Promissory Note to Serik Enterprises, Inc. | 8-K | 8/12/11 | 10.1 | | | 10.8 | Settlement Agreement with Vail International Ltd. | 8-K | 8/12/11 | 10.2 | | | 10.9 | Settlement Agreement with Newton Management Ltd. | 8-K | 8/12/11 | 10.3 | | | 10.10 | Settlement Agreement with Mark Simon. | 8-K | 8/12/11 | 10.4 | | | 10.11 | Settlement Agreement with Carrillo Huettel, LLC. | 8-K | 8/12/11 | 10.5 | | | 10.12 | Asset Acquisition Agreement. | 8-K | 8/17/11 | 10.1 | | | 10.13 | Promissory Note with Hillwinds Ocean Energy, LLC. | 8-K | 8/17/11 | 10.2 | | | 10.14 | Settlement Agreement and General Mutual Release with Serik Enterprises, Inc. | 10-Q | 11/21/11 | 10.14 | | | 10.15 | Draw Down Convertible Promissory Note. | 10-Q | 11/21/11 | 10.15 | | | 10.16 | Intellectual Property License Agreement with Hillwinds Energy Development Corporation. | 10-K | 4/16/12 | 10.1 | | | 10.17 | Exclusivity and Feasibility Study Agreement with City of Saint John. | 8-K | 12/05/12 | 10.1 | | | 10.18 | Intellectual Property License Agreement with Hillwinds Energy Development Corporation dated December 10, 2012. | 8-K | 12/12/12 | 10.1 | | | 10.19 | Consulting Agreement with The Holden Group. | 8-K | 1/03/13 | 10.1 | | | 10.20 | Restructuring Agreement with Dennis Holden. | 8-K/A | 2/14/13 | 10.1 | | | 10.21 | Restructuring Agreement with Stephen Walker. | 8-K/A | 2/14/13 | 10.2 | | | 10.22 | Restructuring Agreement with Lance Warren. | 8-K/A | 2/14/13 | 10.3 | | | Exchange Agreement with Denali Equity Group, LLC. | 10-Q | 5/20/15 | 10.23 | X | | 14.1 | Code of Ethics. | 10-K | 3/29/11 | 14.1 | | | 21.1 | List of subsidiaries | S-1/A-1 | 1/17/13 | 21.1 | | | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | | | | X | | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | | | | X | | 99.1 | Subscription Agreement. | S-1/A-1 | 1/17/13 | 99.1 | | | 101.INS | XBRL Instance Document. | | | | | | 101.SCH | XBRL Taxonomy Extension – Schema. | | | | | | 101.CAL | XBRL Taxonomy Extension – Calculations. | | | | | | 101.LAB | XBRL Taxonomy Extension – Labels. | | | | | | 101.PRE | XBRL Taxonomy Extension – Presentation. | | | | | | 101.DEF | XBRL Taxonomy Extension – Definition. | | | | |
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