x | |
For the quarterly period ended September 30, | |
¨ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
eDOORWAYS CORPORATION |
(Name of small business issuer in its charter) |
Large accelerated filer | ¨ | Non-accelerated filer | ¨ |
Accelerated filer | Smaller reporting company | x |
3 | |||||||
12 | |||||||
16 | |||||||
16 | |||||||
17 | |||||||
17 | |||||||
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17 |
eDOORWAYS CORPORATION | ||||||
BALANCE SHEETS | ||||||
(Unaudited) | ||||||
June 30, | December 31, | |||||
2008 | 2007 | |||||
ASSETS | ||||||
CURRENT ASSET – Cash | $ | 594 | $ | 45,647 | ||
Fixed assets, net of accumulated depreciation of $1,937 and $1,660, respectively | 3,612 | 3,889 | ||||
Deferred financing costs, net of accumulated amortization of $311,722 and $218,052, respectively | 121,679 | 215,686 | ||||
Deposits | 2,000 | 9,211 | ||||
TOTAL ASSETS | $ | 127,885 | $ | 274,433 | ||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||
CURRENT LIABILITIES | ||||||
Accounts payable - trade | $ | 788,126 | $ | 450,651 | ||
Stock payable | 205,185 | - | ||||
Accrued expenses | 1,171,496 | 1,074,587 | ||||
Accrued expenses – related parties | 177,982 | - | ||||
Notes payable | 117,000 | 102,000 | ||||
Convertible debentures, 6%, net of discount of $1,461,142 and $1,811,528, respectively | 780,042 | 434,826 | ||||
Convertible debenture derivative liability | 12,212,792 | 2,805,523 | ||||
TOTAL LIABILITIES | 15,452,623 | 4,867,587 | ||||
Commitments and contingencies | - | |||||
STOCKHOLDERS' DEFICIT | ||||||
Series A convertible preferred stock, $0.001 par value per share; 7,000,000 shares authorized, none issued | - | - | ||||
Series B convertible preferred stock, $0.001 par value per share; 1,100,000 shares authorized, none issued | - | - | ||||
Series C convertible preferred stock, $0.001 par value per share; 1,000,000 shares authorized, 1,000,000 and -0- shares issued and outstanding, respectively | 1,000 | - | ||||
Series D preferred stock, $0.001 par value per share; 1,000 shares authorized, issued and outstanding | 1 | 1 | ||||
Common stock, $0.001 par value per share; 990,899,000 shares authorized; 188,850,146 and 13,318,846 shares issued and outstanding, respectively | 188,850 | 13,318 | ||||
Additional paid-in capital | 65,064,265 | 62,818,788 | ||||
Accumulated deficit | (80,578,854) | (67,425,261 | ) | |||
Total stockholders' deficit | (15,324,738) | (4,593,154 | ) | |||
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 127,885 | $ | 274,433 |
30-Sep-09 | 31-Dec-08 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash | $ | 39,025 | $ | 5,467 | ||||
OTHER CURRENT ASSETS | ||||||||
Software Development Cost | 237,327 | |||||||
OTHER ASSETS | ||||||||
Fixed assets, net of accumulated depreciation of $2,215 and $1,660, respectively | 3,196 | 3,334 | ||||||
Deposits | 2,000 | 2,000 | ||||||
Total Other Assets | 5,196 | 5,334 | ||||||
TOTAL ASSETS | $ | 281,548 | $ | 10,801 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable – trade | $ | 748,728 | $ | 743,075 | ||||
Judgments payable | 847,688 | 838,610 | ||||||
Stock payable | 645,312 | 354,312 | ||||||
Accrued expenses – related parties | 777,622 | 403,043 | ||||||
Accrued expenses – other | 0 | 92,518 | ||||||
Current portion of notes payable | 609,852 | 668,565 | ||||||
Convertible debentures 6%, net of discount of $-0- and $1,811,528, respectively | - | - | ||||||
Convertible debenture derivative liability | - | - | ||||||
TOTAL CURRENT LIABILITIES | 3,629,202 | 3,100,123 | ||||||
LONG TERM LIABILITIES | ||||||||
Notes payable | 5,216,000 | 4,759,835 | ||||||
TOTAL LIABILITIES | 8,845,202 | 7,859,958 | ||||||
STOCKHOLDERS' DEFICIT | ||||||||
Series A convertible preferred stock, $0.001 par value per share; 7,000,000 shares authorized, none issued | - | - | ||||||
Series B convertible preferred stock, $0.001 par value per share; 1,100,000 shares authorized, none issued | - | - | ||||||
Series C convertible preferred stock, $0.001 par value per share; 1,000,000 shares authorized, 1,000,000 and -0- shares issued and outstanding, respectively | 1,000 | 1,000 | ||||||
Series D preferred stock, $0.001 par value per share; 1,000 shares authorized, issued and outstanding, respectively | 1 | 1 | ||||||
Common stock, $0.001 par value per share; 990,899,000 shares authorized; 647,121,227 shares issued and outstanding, respectively | 647,121 | 317,747 | ||||||
Additional paid-in capital | 69,784,069 | 66,003,083 | ||||||
Accumulated deficit | (78,995,845 | ) | (74,170,988.00 | ) | ||||
TOTAL STOCKHOLDERS’ DEFICIT | (8,563,654 | ) | (7,849,157 | ) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 281,548 | $ | 10,801 |
3 |
eDOORWAYS CORPORATION | ||||||||||||
STATEMENTS OF OPERATIONS | ||||||||||||
(Unaudited) | ||||||||||||
For The Three Months Ended June 30, | For The Six Months Ended June 30, | |||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||
REVENUE | $ - | $ - | $ - | $ - | ||||||||
OPERATING EXPENSES | ||||||||||||
Depreciation and amortization | 138 | 139 | 277 | 277 | ||||||||
Compensation expense | 122,008 | 122,500 | 602,000 | 252,500 | ||||||||
Professional fees | 66,444 | 35,870 | 74,227 | 143,783 | ||||||||
General and administrative | 2,016,461 | 169,057 | 2,353,102 | 214,623 | ||||||||
Total operating expense | 2,205,051 | 327,566 | 3,029,606 | 611,183 | ||||||||
LOSS FROM OPERATIONS | (2,205,051 | ) | (327,566) | (3,029,606 | ) | (611,183) | ||||||
OTHER INCOME (EXPENSES) | ||||||||||||
Interest expense | (274,402 | ) | (180,746) | (547,729 | ) | (341,337) | ||||||
Loss on derivative liability | (6,609,111 | ) | (1,288,059) | (9,411,758 | ) | (622,440) | ||||||
Loss on debt settlement | (157,500 | ) | - | (164,500 | ) | - | ||||||
Total other expenses | (7,041,013 | ) | (1,468,805) | �� | (10,123,987 | ) | (963,777) | |||||
NET LOSS | $ | (9,246,064 | ) | $ | (1,796,371) | $ | (13,153,593 | ) | $ | (1,574,960) | ||
LOSS PER SHARE – Basic and diluted | $ | (0.07 | ) | $ | (16.09) | $ | (0.15 | ) | $ | (18.75) | ||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING – Basic and diluted | 136,610,923 | 111,646 | 90,631,917 | 84,018 |
For The Three Months Ended September 30th | For The Nine Months Ended September 30th | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
REVENUE | $ | - | $ | - | $ | - | $ | - | ||||||||
OPERATING EXPENSES | ||||||||||||||||
Compensation | 150,592 | 147,000 | 451,776 | 421375 | ||||||||||||
Depreciation & Amortization | 46 | 139 | 138 | 416 | ||||||||||||
General and Administrative | 181,416 | 274292 | 886,727 | 2,973,350 | ||||||||||||
Legal & Professional Services | 20,843 | 22,684 | 106,216 | 96,911 | ||||||||||||
Total operating expenses | 352,897 | 444,115 | 1,444,857 | 3,492,052 | ||||||||||||
LOSS FROM OPERATIONS | (352,897 | ) | (444,115 | ) | (1,444,857 | ) | (3,492,052 | ) | ||||||||
OTHER INCOME (EXPENSES) | ||||||||||||||||
Gain on debt Exitnguishment | 7,690 | 7,690 | ||||||||||||||
Gain (loss) on derivative liability | 8,045,443 | (114,800 | ) | (1,359,315 | ) | |||||||||||
Interest expense | (17,957 | ) | (238,379 | ) | (17,957 | ) | (781,777 | ) | ||||||||
Loss on debt settlement | (3,010,771 | ) | (3,247,243 | ) | (157,500 | ) | ||||||||||
Total other income (expenses) | (3,028,728 | ) | 7,814,754 | (3,380,000 | ) | (2,290,902 | ) | |||||||||
NET LOSS | $ | (3,381,625 | ) | $ | 7,370,639 | $ | (4,824,857 | ) | $ | (5,782,954 | ) | |||||
LOSS PER SHARE: | ||||||||||||||||
Basic and diluted | (0.0052 | ) | 0.0405 | (0.0075 | ) | (0.0318 | ) | |||||||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: | ||||||||||||||||
Basic and diluted | 647,121,227 | 181,899,834 | 647,121,227 | 181,899,834 |
4 |
Series C Preferred Stock | Series D Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ | |||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||||||||
Balance, December 31,2006 | - | - | 1,000 | $ | 1 | 37,749 | $ | 38 | $ | 61,473,512 | $ | (65,748,684 | ) | $ | (4,275,133 | ) | ||||||||||||||||||||
Common stock issued for services | - | 10,008,000 | 10,008 | 591,192 | 601,200 | |||||||||||||||||||||||||||||||
Conversions of debt and promissory notes into equity | 3,274,097 | 3,273 | 290,771 | 294,044 | ||||||||||||||||||||||||||||||||
Fair value of derivatives converted to equity | 433,132 | 433,132 | ||||||||||||||||||||||||||||||||||
Beneficial conversion feature converted to equity | 59,180 | 59,180 | ||||||||||||||||||||||||||||||||||
Cancelled shares for services | (1,000 | ) | (1 | ) | (28,999 | ) | (29,000 | ) | ||||||||||||||||||||||||||||
Net loss for the year ended December 31,2007 | (1,676,577 | ) | (1,676,577 | ) | ||||||||||||||||||||||||||||||||
Balance – December 31, 2007 | - | $ | - | 1,000 | $ | 1 | 13,318,846 | $ | 13,318 | $ | 62,818,788 | $ | (67,425,261 | ) | $ | (4,593,154 | ) | |||||||||||||||||||
Preferred stock issued for compensation | 750,000 | 750 | - | - | - | - | 134,250 | - | 135,000 | |||||||||||||||||||||||||||
Preferred stock issued for services | 250,000 | 250 | - | - | - | - | 44,750 | - | 45,000 | |||||||||||||||||||||||||||
Common stock issued for services | - | - | - | - | 229,384,143 | 229,384 | 1,844,916 | - | 2,074,300 | |||||||||||||||||||||||||||
Common stock issued for compensation | - | - | - | - | 40,437,500 | 40,438 | 312,325 | - | 352,763 | |||||||||||||||||||||||||||
Common stock issued for debt conversion | - | - | - | - | 34,606,738 | 34,607 | 813,290 | - | 847,897 | |||||||||||||||||||||||||||
Fair value of derivatives converted to equity | - | - | - | - | - | - | 4,489 | - | 4,489 | |||||||||||||||||||||||||||
Discount on convertible debt | - | - | - | - | - | - | 16,262 | - | 16,262 | |||||||||||||||||||||||||||
Fair value adjustment for elimination of derivatives | - | - | - | - | - | - | 14,013 | - | 14,013 | |||||||||||||||||||||||||||
Net loss | - | - | - | - | 0 | $ | - | - | $ | (6,745,727 | ) | $ | (6,745,727 | ) | ||||||||||||||||||||||
Balance - December 31, 2008 | 1,000,000 | $ | 1,000.0 | 1,000 | $ | 1 | 317,747,227 | $ | 317,747 | $ | 66,003,083 | $ | (74,170,988 | ) | $ | (7,849,157 | ) | |||||||||||||||||||
Common stock issued for services | 252,151,000 | 252,151 | 1,134,296 | |||||||||||||||||||||||||||||||||
Common stock issued for compensation | 77,223,000 | 77,223 | 756,197 | |||||||||||||||||||||||||||||||||
Common stock issued for debt conversion | 1,890,494 | |||||||||||||||||||||||||||||||||||
Net loss | (4,824,857 | ) | (4,824,857 | ) | ||||||||||||||||||||||||||||||||
Balance - September 31, 2009 | 1,000,000 | $ | 1,000 | 1,000 | $ | 1 | 647,121,227 | $ | 647,121 | $ | 69,784,070 | $ | (78,995,845 | ) | $ | (8,563,653 | ) |
Additional | Total | ||||||||||||||||
Series C Preferred Stock | Series D Preferred Stock | Common Stock | Paid-in | Accumulated | Stockholders’ | ||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | |||||||||
Balance –December 31, 2008 | - | $ - | 1,000 | $ 1 | 13,318,846 | $ 13,318 | $ 62,818,788 | $ (67,425,261) | $ (4,593,154) | ||||||||
Preferred stock issued for services and compensation | 1,000,000 | 1,000 | - | - | - | - | 139,000 | - | 140,000 | ||||||||
Common stock issued for services and compensation | - | - | - | - | 143,431,300 | 143,432 | 1,291,666 | - | 1,435,098 | ||||||||
Common stock issued for debt conversions | - | - | - | - | 32,100,000 | 32,100 | 805,570 | - | 837,670 | ||||||||
Fair value of derivatives converted to equity | - | - | - | - | - | - | 4,489 | - | 4,489 | ||||||||
Debt discount on convertible debt | - | - | - | - | - | - | 4,752 | - | 4,752 | ||||||||
Net loss | - | - | - | - | - | - | - | (13,153,593) | (13,153,593) | ||||||||
Balance - June 30, 2008 | 1,000,000 | $ 1,000 | 1,000 | $ 1 | 188,850,146 | $ 188,850 | $ 65,064,265 | $ (80,578,854) | $ (15,324,738) |
5 |
eDOORWAYS CORPORATION | ||
STATEMENTS OF CASH FLOW | ||
(Unaudited) | ||
Six Months Ended June 30, | ||
2008 | 2007 | |
CASH FLOWS FROM OPERATING ACTIVITES |
Net loss | $ | (13,153,593) | $ | (1,574,960) |
Adjustments to reconcile net loss to net cash used in operating activities | ||||
Depreciation and amortization expense | 277 | 277 | ||
Amortization of deferred financing costs | 94,007 | - | ||
Amortization of note payable discount | 355,138 | - | ||
Preferred stock and common stock issued for services | 1,575,098 | - | ||
Notes payable issued for services | 665,000 | - | ||
Change in fair value of derivative | 9,411,758 | 622,441 | ||
Loss on conversion of note payable | 164,500 | - | ||
Non-cash interest expense | 98,584 | 352,389 | ||
Cancellation of stock issued for services | - | (29,000) | ||
Changes in operating assets and liabilities: | ||||
Deposits | 7,211 | (3,849) | ||
Accounts payable and accrued expenses | 335,800 | 14,040 | ||
Accounts payable and accrued expenses - related parties | 177,982 | - | ||
Stock payable | 205,185 | - | ||
Net cash used in operating activities | (63,053) | (618,663) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from issuance of new debt | 18,000 | 148,500 | ||
NET DECREASE IN CASH | (45,053) | (470,163) | ||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 45,647 | 728,393 | ||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 594 | $ | 258,230 |
Cash paid for: | ||||
Interest | $ | - | $ | - |
Taxes | - | $ | - | |
$ | ||||
Non cash investing and financing transactions: | ||||
Conversion of derivative liability | $ | 4,489 | $ | 111,044 |
Common stock issued to convert debt | $ | 837,670 | $ | 87,871 |
Discount on issuance of convertible debt | $ | 4,752 | $ | - |
For The Three Months Ended September 30th | For The Nine Months Ended September 30th | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
CASH FLOWS FROM OPERATING ACTIVITES | ||||||||||||||||
Net Income/Loss | $ | (3,381,625 | ) | $ | 7,370,639 | $ | (4,824,857 | ) | $ | (5,782,954 | ) | |||||
Adjustments to reconcile net loss to net cash used in operating activities | �� | |||||||||||||||
Depreciation and amortization expense | 46 | 138 | ||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Prepaid insurance | ||||||||||||||||
Deposits | ||||||||||||||||
Accounts payable | 5,653 | 72,536 | 5,653 | 410,011 | ||||||||||||
Current portion of notes payable | (409,985 | ) | 277,274 | (58,713 | ) | 218,116 | ||||||||||
Conversion of derivative liability | (12,212,792 | ) | (2,805,523 | ) | ||||||||||||
Convertible debentures | (780,042 | ) | (434,826 | ) | ||||||||||||
Stock payable | 291,000 | (140,035 | ) | 291,000 | 65,150 | |||||||||||
Judgments payable | 9,078 | 9,078 | ||||||||||||||
Accrued expenses | (937,505 | ) | (254,037 | ) | (92,518 | ) | (82,970 | ) | ||||||||
Accrued expenses – related parties | 73,395 | 143,061 | 374,579 | 321,043 | ||||||||||||
Software Development Cost | (183,024 | ) | (237,327 | ) | ||||||||||||
Net cash used in operating activities | $ | (4,532,967 | ) | $ | (5,523,396 | ) | $ | (4,532,967 | ) | $ | (8,091,953 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||||
Fixed Assets | 139 | 416 | ||||||||||||||
Deferred financing cost | 121,679 | 215,686 | ||||||||||||||
Deposits | 7,211 | |||||||||||||||
Total cash flow from Investing Activities | $ | - | $ | 121,818 | $ | - | $ | 223,313 | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||||
APIC | 3,780,986 | 343,333 | 3,780,986 | 2,588,810 | ||||||||||||
Common Stock | 329,374 | 38,589 | 329,374 | 214,121 | ||||||||||||
Preferred Stock Series C | 1,000 | |||||||||||||||
Proceeds from Long term Liabilities | 448,487 | 5,019,726 | 456,165 | 5,019,726 | ||||||||||||
Total cash flow from Fianancing Activities | $ | 4,558,847 | $ | 5,401,648 | $ | 4,566,525 | $ | 7,823,657 | ||||||||
Net Cash Increase for period. | 25,880 | 70 | 33,558 | (44,983 | ) | |||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 13,145 | 594 | 5,467 | 45,647 | ||||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 39,025 | $ | 664 | $ | 39,025 | $ | 664 |
6 |
7 |
8 |
Year ending December 31, | ||||
2010 | 1,295,412 | |||
2011 | 2,266,974 | |||
2012 | 1,457,340 | |||
Total | $ | 5,414,000 | ||
June 30, 2008 | December 31, 2007 | Gain (loss) | ||
Embedded derivative – Convertible Debentures | $ 11,912,309 | $ 2,715,417 | $ (9,201,381) | (a) |
Freestanding derivative – Warrants | 300,483 | 90,106 | (210,377) | |
Total | $ 12,212,792 | $ 2,805,523 | $ (9,411,758) |
Monthly Amount | Total Each Period | |||
Month 1-3 | $ 37,782 | $ 113,346 | ||
Month 4-6 | 53,976 | 161,928 | ||
Month 7-12 | 80,963 | 485,778 | ||
Month 13-24 | 134,939 | 1,619,268 | ||
Month 25-36 | 242,890 | 2,914,680 | ||
Total | $ 5,295,000 |
10 |
1. | 58% or $29,000 of the monthly compensation shall be paid in the form of Restricted Common Stock determined based on a 10% discount from the day’s prior closing bid price. Such compensation is not to exceed 5,800,000 shares or calculate lower than a per share price of $0.005. If the per share price of the Compensation equates to less than $0.005, the Company shall issue the maximum shares of 5,800,000 and pay the deficit in cash within 30 days. The first payment was due on April 1, |
2. | 39% or $19,500 of the monthly compensation shall be in the form of eDoorways’ common stock on the first business day of each month. Such compensation is not to exceed 2,785,714 shares or calculate lower than a per share price of $0.007. If the per share price of the Compensation equates to less than $0.007, eDoorways shall issue the Maximum shares of 2,785,714 and pay the deficit in cash within 30 days. The first payment was due on April 1, |
3. | 3% or $1,500 of the monthly compensation shall be paid in cash on the first business day of each month. |
Input Levels for Fair Value Measurements | ||||||||
Description | Level 1 | Level 2 | Level 3 | Total | ||||
Liabilities: | ||||||||
Convertible debenture derivative liability | $ - | $ 12,212,792 | $ - | $ 12,212,792 | ||||
$ - | $ 12,212,792 | $ - | $ 12,212,792 |
Monthly Amount | Total Each Period | |||
Month 1-3 | $ 37,782 | $ 113,346 | ||
Month 4-6 | 53,976 | 161,928 | ||
Month 7-12 | 80,963 | 485,778 | ||
Month 13-24 | 134,939 | 1,619,268 | ||
Month 25-36 | 242,890 | 2,914,680 | ||
Total | $ 5,295,000 |
12 |
(a) | eDOORWAYS B to C Initial Launch in Austin ($1.5 million) |
· | Marketing |
· |
Site Development & Technology Infrastructure |
· | Furniture Fixtures & Equipment | |
· | Facilities & Office | |
· | Compensation | |
· | Working Capital | |
· | Reserve for Contingencies |
eDOORWAYS B to C National Launch ($ |
· | Marketing |
· |
Site Development & Technology Infrastructure |
· | Furniture Fixtures & Equipment |
· | Facilities & Office |
· | Compensation |
· | Working Capital |
· | Reserve for Contingencies |
(c) | Retire outstanding notes payable ($ |
13 |
15 |
16 |
17 |
Exhibit No. | Description | Filed Herewith | Previously Filed and Incorporated | |||
x |
x | ||||||
x |
18 |
Carnegie Development, Inc. | |||
Date: | /s/ Saskya Bedoya | ||
Saskya Bedoya, President |
19 |