Convertible Notes and Warrants. The Company entered into a series of financing agreements over the last three years under which it issued convertible notes and Class A and Class B Warrants to purchase its common stock. The Company had an aggregate of $4,039,413 in principal outstanding in convertible notes payable and Class A Warrants outstanding to purchase an aggregate of 90,010,706 shares of common stock at exercise prices ranging from $0.035 to $15.00 per share, with expiration dates ranging from April 2011 to January 2016. The Class B Warrants will be issued upon exercise of certain Class A Warrants and have an exercise price of $15.00 per share. Upon exercise of certain Class A Warrants, the Company would have the obligation to issue Class B Warrants to purchase 278,068 shares of common stock at an exercise price of $15.00 per share. Class B Warrants to purchase 35,000 shares of common stock have a three year term and Class B Warrants representing the right to purchase 243,068 shares will expire after five years. See attached capitalization schedule which is incorporated by reference herein. The issuance of securities at lower prices than existing long-term notes/warrants will reset existing long-term notes and warrants to a lower conversion/exercise price. The Company has an aggregate of $4,039,413 in principal outstanding in convertible notes payable at conversion prices of $.035 unless the market price is lower in which the conversion price will be based on a range of 75%-80% of the average of 3-5 lowest closing bid prices over a range of 10-20 days prior to the conversion date and Class A Warrants outstanding to purchase an aggregate of 90,010,706 shares of common stock at exercise prices ranging from $0.035 to $15.00 per share, with expiration dates ranging from April 2011 to January 2016. The Class B Warrants will be issued upon exercise of certain Class A Warrants and have an exercise price of $15.00 per share. Upon exercise of certain Class A Warrants, the Company would have the obligation to issue Class B Warrants to purchase 278,068 shares of common stock at an exercise price of $15.00 per share. Class B Warrants to purchase 35,000 shares of common stock have a three year term and Class B Warrants representing the right to purchase 243,068 shares will expire after five years. SCHEDULE 5(h) Litigation On May 18, 2009, F&M Merchant Group, LLC commenced a lawsuit in the state of Texas to recover the balance owed by us under a Sales Agent Agreement entered by the parties on November 1, 2008. This agreement requires us to pay $5,000 per month and a 5% commission on all net sales. On September 3, 2009, a final judgment by default was approved by the district court in Xxxxxx County, Texas for a total sum of $22,348. This claim has been recorded on the Company’s records. Due to the lack of adequate capital financing, we have not been able to make any payments. On June 5, 2009, Xxxxxx Motor Sports, Inc. commenced a lawsuit in the state of Florida to recover the balance owed by us under a Letter of Agreement to sponsor a Top Fuel Dragster for the 2008 NHRA racing season in the amount of $803,750. Out of this total amount, only $300,000 is required to be paid in cash with the remainder to be paid in shares of common stock. This amount had already been recorded in our records. Xxxxxx Xxx, 0000, Xxxxxx Motor Sports, Inc. dismissed the lawsuit without prejudice. Prior to that time, the parties went through mediation but were unable to settle. The likelihood of an unfavorable outcome cannot be evaluated as another lawsuit possibly could be filed against the Company. On August 21, 2009, CH Fulfillment Services, LLC commenced a lawsuit in the state of Alabama to recover past due amounts owed by us under a contract to provide shipping and fulfillment services. The claim is for $2,106 plus interest and legal costs. This amount was already recorded on our records as well as projected interest costs of $682 and estimated court costs of $307 for a total of $3,095. This amount was recorded on our records. A process of garnishment by the district court in Mobile County, Alabama was approved on September 25, 2009 for the total amount of $3,095. On October 26, 2009, the same court authorized a garnishment process to pay $657 which was done as part payment of the total due amount. No other payments have been paid. On November 9, 2009, Nationwide Distribution Services, Inc. filed a lawsuit in the state of Florida to recover past due amounts owed by us under a contract to provide storage and warehouse fees. The Court approved a final judgment on January 11, 2010 in the sum of $3,650, court costs of $350 and interest fees of $959 for a total sum of $4,959. We have already recorded a similar amount in our records. As of April 2, 2010, we received a letter of notification from Nationwide Distribution Services, Inc. that at 12:00 noon on April 19, 2010, the products owned by us and stored at their facilities were sold at public auction. This sale constituted satisfaction of the final judgment brought against us. On September 16, 2010, Fortitech, Inc. filed a lawsuit in the state of Florida to recover past due amounts owed by us under a contract to provide goods for a certain beverage product. Fortitech is seeking an amount of $18,584 plus interest and costs. We have already recorded $18,334 of the total in our records. The Opportunity Fund, LLC filed a lawsuit in the state of Ohio on October 15, 2010 to recover $120,000 and $33,000 (total of $153,000) plus interest of 15% for two short term bridge loans that are in default. These amounts have already been recorded on our records. On January 28, 2011, we received notification of a lawsuit filed by Vintage Filings, LLC in the state of Florida on December 30, 2010 to recover $7,507, together with interest, for past due services. We have already recorded $7,384 of the total in our records. We expect to resolve this matter as soon as practical.
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Samples: Subscription Agreement (Attitude Drinks Inc.), Subscription Agreement (Attitude Drinks Inc.)
Convertible Notes and Warrants. The Company entered into a series of financing agreements over the last three four years under which it issued convertible notes and Class A and Class B Warrants to purchase its common stock. The At January 18, 2012, the Company had an aggregate of $4,039,413 4,967,376 in principal outstanding in convertible notes payable and Class A Warrants outstanding to purchase an aggregate of 90,010,706 163,657,373 shares of common stock at exercise prices ranging from $0.035 0.02 to $15.00 per share, with expiration dates ranging from April 2011 December 2012 to January July 2016. The Class B Warrants will be issued upon exercise of certain Class A Warrants and have an exercise price of $15.00 per share. Upon exercise of certain Class A Warrants, the Company would have the obligation to issue Class B Warrants to purchase 278,068 243, 068 shares of common stock at an exercise price of $15.00 per share. These Class B Warrants to purchase 35,000 shares of common stock have a three five year term and Class B Warrants representing the right to purchase 243,068 shares will expire after five yearsterm. See attached capitalization schedule which is incorporated by reference herein. The SCHEDULE 5(f)(iii) Except for certain excepted issuances, the issuance of securities at lower prices than existing long-term notes/warrants will reset existing long-term notes and warrants conversion/exercise prices to a lower conversion/exercise price. The At January 18, 2012, the Company has an aggregate of $4,039,413 4,967,376 in principal outstanding in convertible notes payable at a conversion prices price of $.035 .02 unless the market price is lower in which the conversion price will be based on a range of 75%-80% of the average of 3-5 lowest closing bid prices over a range of 10-20 days prior to the conversion date and Class A Warrants outstanding to purchase an aggregate of 90,010,706 163,657,373 shares of common stock at exercise prices ranging from $0.035 0.02 to $15.00 per share, with expiration dates ranging from April 2011 December 2012 to January July 2016. The Class B Warrants will be issued upon exercise of certain Class A Warrants and have an exercise price of $15.00 per share. Upon exercise of certain Class A Warrants, the Company would have the obligation to issue Class B Warrants to purchase 278,068 243, 068 shares of common stock at an exercise price of $15.00 per share. Class B Warrants to purchase 35,000 shares of common stock have a three year term and Class B Warrants representing the right to purchase 243,068 shares will expire after five years. SCHEDULE 5(h) Litigation On May 18, 2009, F&M Merchant Group, LLC commenced a lawsuit in the state of Texas to recover the balance owed by us under a Sales Agent Agreement entered by the parties on November 1, 2008. This agreement requires us to pay $5,000 per month and a 5% commission on all net sales. On September 3, 2009, a final judgment by default was approved by the district court in Xxxxxx County, Texas for a total sum of $22,34822,347. This claim has been recorded on the Company’s records. Due to the lack of adequate capital financing, we have not been able to make any payments. We expect to resolve this matter as soon as practical. On June 5, 2009, Xxxxxx Motor Sports, Inc. commenced a lawsuit in the state of Florida to recover the balance owed by us under a Letter of Agreement to sponsor a Top Fuel Dragster for the 2008 NHRA racing season in the amount of $803,750. Out of this total amount, only $300,000 is required to be paid in cash with the remainder to be paid in shares of common stock. This amount had already been recorded in our records. Xxxxxx Xxx, 0000, Xxxxxx Motor Sports, Inc. dismissed the lawsuit without prejudice. Prior to that time, the parties went through mediation but were unable to settle. The likelihood of an unfavorable outcome cannot be evaluated as another lawsuit possibly could be filed against the Company. On August 21, 2009, CH Fulfillment Services, LLC commenced a lawsuit in the state of Alabama to recover past due amounts owed by us under a contract to provide shipping and fulfillment services. The claim is for $2,106 plus interest and legal costs. This amount was already recorded on our records as well as projected interest costs of $682 and estimated court costs of $307 for a total of $3,095. This amount was recorded on our records. A process of garnishment by the district court in Mobile County, Alabama was approved on September 25, 2009 for the total amount of $3,095. On October 26, 2009, the same court authorized a garnishment process to pay $657 which was done as part payment of the total due amount. No other payments have been paid. On November 9, 2009, Nationwide Distribution Services, Inc. filed a lawsuit in the state of Florida We expect to recover past due amounts owed by us under a contract to provide storage and warehouse fees. The Court approved a final judgment on January 11, 2010 in the sum of $3,650, court costs of $350 and interest fees of $959 for a total sum of $4,959. We have already recorded a similar amount in our records. As of April 2, 2010, we received a letter of notification from Nationwide Distribution Services, Inc. that at 12:00 noon on April 19, 2010, the products owned by us and stored at their facilities were sold at public auction. This sale constituted satisfaction of the final judgment brought against usresolve this matter as soon as practical. On September 16, 2010, Fortitech, Inc. filed a lawsuit in the state of Florida to recover past due amounts owed by us under a contract to provide goods for a certain beverage product. Fortitech is seeking an amount of $18,584 plus interest and costs. Both parties reached a settlement agreement on March 25, 2011 in which we agreed to pay Fortitech, Inc. a total sum of $19,020. We have had already recorded $18,334 of the total $19,020 in our records. The Opportunity FundWe agreed to pay $1,585 on May 1, LLC filed a lawsuit in the state of Ohio on October 15, 2010 to recover $120,000 2011 which was paid and $33,000 1,585 on the first day of each following month for a total of twelve (12) months until the total is paid in full. We are not current in paying the December 2011 and January 2012 amounts for a total of $153,0003,170. We expect to make these payments shortly. Including the $3,170, the total outstanding payable balance is $6,340. SCHEDULE 5(k) plus interest Solvency As set forth in the Company’s Reports, its total current liabilities exceed its total assets. Even with the proceeds from the sale of 15% for two short securities hereunder and the Company’s current cash flow, the Company will need additional funds to continue operations and pay the Company’s debts when they become due. The Company is currently in default of certain short-term bridge loans that are notes and has substantial debt obligations. SCHEDULE 5(l) Defaults The Company is in default in paying April 14, 2008 and August 5, 2008 non-convertible debt obligations in which the debt holders agreed in January, 2009 to extend the due dates to April 30, 2009. The Company is working on the extension of the due dates for these debts which amount to $115,000 in default. These amounts have already been recorded on our records. On January 28, 2011, we received notification of a lawsuit filed by Vintage Filings, LLC in the state of Florida on December 30, 2010 to recover $7,507, together with interest, for past due services. We have already recorded $7,384 of the total in our records. We expect to resolve this matter as soon as practical., although there is no guarantee. The Company’s convertible note obligations totaled $4,967,376 in principal at January 18, 2012, as set forth on Schedule 5(d). The due dates for these convertible notes are from March 31, 2012 through January 15 2013. SCHEDULE 5(o) Undisclosed Liabilities None. SCHEDULE 5(w) Transfer Agent The current transfer agent is Pacific Stock Transfer
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Convertible Notes and Warrants. The Company entered into a series of financing agreements over the last three years under which it issued convertible notes and Class A and Class B Warrants to purchase its common stock. The Company had an aggregate of $4,039,413 4,389,164 in principal outstanding in convertible notes payable and Class A Warrants outstanding to purchase an aggregate of 90,010,706 116,192,373 shares of common stock at exercise prices ranging from $0.035 0.02 to $15.00 per share, with expiration dates ranging from April July 2011 to January March 2016. The Class B Warrants will be issued upon exercise of certain Class A Warrants and have an exercise price of $15.00 per share. Upon exercise of certain Class A Warrants, the Company would have the obligation to issue Class B Warrants to purchase 278,068 shares of common stock at an exercise price of $15.00 per share. Class B Warrants to purchase 35,000 shares of common stock have a three year term and Class B Warrants representing the right to purchase 243,068 shares will expire after five years. See attached capitalization schedule which is incorporated by reference herein. The Except for certain excepted issuances, the issuance of securities at lower prices than existing long-term notes/warrants will reset existing long-term notes and warrants conversion/exercise prices to a lower conversion/exercise price. The Company has an aggregate of $4,039,413 4,389,164 in principal outstanding in convertible notes payable at a conversion prices price of $.035 .02 unless the market price is lower in which the conversion price will be based on a range of 75%-80% of the average of 3-5 lowest closing bid prices over a range of 10-20 days prior to the conversion date and Class A Warrants outstanding to purchase an aggregate of 90,010,706 116,192,373 shares of common stock at exercise prices ranging from $0.035 0.02 to $15.00 per share, with expiration dates ranging from April July 2011 to January March 2016. The Class B Warrants will be issued upon exercise of certain Class A Warrants and have an exercise price of $15.00 per share. Upon exercise of certain Class A Warrants, the Company would have the obligation to issue Class B Warrants to purchase 278,068 shares of common stock at an exercise price of $15.00 per share. Class B Warrants to purchase 35,000 shares of common stock have a three year term and Class B Warrants representing the right to purchase 243,068 shares will expire after five years. SCHEDULE 5(h) Litigation On May 18, 2009, F&M Merchant Group, LLC commenced a lawsuit in the state of Texas to recover the balance owed by us under a Sales Agent Agreement entered by the parties on November 1, 2008. This agreement requires us to pay $5,000 per month and a 5% commission on all net sales. On September 3, 2009, a final judgment by default was approved by the district court in Xxxxxx County, Texas for a total sum of $22,34822,347. This claim has been recorded on the Company’s records. Due to the lack of adequate capital financing, we have not been able to make any payments. We expect to resolve this matter as soon as practical. On June 5, 2009, Xxxxxx Motor Sports, Inc. commenced a lawsuit in the state of Florida to recover the balance owed by us under a Letter of Agreement to sponsor a Top Fuel Dragster for the 2008 NHRA racing season in the amount of $803,750. Out of this total amount, only $300,000 is required to be paid in cash with the remainder to be paid in shares of common stock. This amount had already been recorded in our records. Xxxxxx Xxx, 0000, Xxxxxx Motor Sports, Inc. dismissed the lawsuit without prejudice. Prior to that time, the parties went through mediation but were unable to settle. The likelihood of an unfavorable outcome cannot be evaluated as another lawsuit possibly could be filed against the Company. On August 21, 2009, CH Fulfillment Services, LLC commenced a lawsuit in the state of Alabama to recover past due amounts owed by us under a contract to provide shipping and fulfillment services. The claim is for $2,106 plus interest and legal costs. This amount was already recorded on our records as well as projected interest costs of $682 and estimated court costs of $307 for a total of $3,095. This amount was recorded on our records. A process of garnishment by the district court in Mobile County, Alabama was approved on September 25, 2009 for the total amount of $3,095. On October 26, 2009, the same court authorized a garnishment process to pay $657 which was done as part payment of the total due amount. No other payments have been paid. We expect to resolve this matter as soon as practical. On November 9, 2009, Nationwide Distribution Services, Inc. filed a lawsuit in the state of Florida to recover past due amounts owed by us under a contract to provide storage and warehouse fees. The Court approved a final judgment on January 11, 2010 in the sum of $3,650, court costs of $350 and interest fees of $959 for a total sum of $4,959. We have already recorded a similar amount in our records. As of April 2, 2010, we received a letter of notification from Nationwide Distribution Services, Inc. that at 12:00 noon on April 19, 2010, the products owned by us and stored at their facilities were sold at public auction. This sale constituted satisfaction of the final judgment brought against us. No further actions are required. On September 16, 2010, Fortitech, Inc. filed a lawsuit in the state of Florida to recover past due amounts owed by us under a contract to provide goods for a certain beverage product. Fortitech is seeking an amount of $18,584 plus interest and costs. Both parties reached a settlement agreement on March 25, 2011 in which we agreed to pay Fortitech, Inc. a total sum of $19,020. We have had already recorded $18,334 of the total $19,020 in our records. We agreed to pay $1,585 on May 1, 2011 which was paid and $1,585 on the first day of each following month for a total of twelve (12) months until the total is paid in full. We are current in our payments for each month. On October 15, 2010, the Opportunity Fund, LLC filed a lawsuit in the state of Ohio to recover $120,000 and $33,000 (total of $153,000) plus interest of 15% for two short term bridge loans that are in default. These amounts have already been recorded on our records. We expect to resolve this matter as soon as practical. On January 28, 2011, we received notification of a lawsuit filed by Vintage Filings, LLC. in the state of Florida on December 30, 2010 to recover $7,507, together with interest, for past due services. Both parties agreed on a settlement amount of $7,867 which we have recorded this amount in our records. We agreed to make monthly payments in the amount of $1,500 on or before the first of the month commencing April 1, 2011. We are current in our payments for each month. On February 23, 2011, we received notice of a lawsuit filed in the state of Florida from Co Color to recover $1,217 plus interest and court costs for past due services. Both parties agreed on a settlement amount of $1,442 which we have recorded this amount in our records. We paid the $1,442 in March, 2011 as no further actions are required. SCHEDULE 5(k) Solvency As set forth in the Company’s Reports, its total current liabilities exceed its total assets. Further, the Company’s long-term convertible notes payable as of March 31, 2011 are $2,429,754. Even with the proceeds from the sale of securities hereunder and the Company’s current cash flow, the Company will need additional funds to continue operations and pay the Company’s debts when they become due. The Company is currently in default of certain of its short-term bridge notes and has substantial debt obligations. SCHEDULE 5(l) Defaults The Company is in default in paying certain Xxxxx-0000, Xxx-0000 and August-2008 debt obligations in which the debt holders agreed in January, 2009 to extend the due dates to April 30, 2009. The Company is working on the extension of the due dates for these debts which amount to $268,000. One of the April-2008 debts had the due date extended to March 31, 2011 which was paid through the issuance of common stock on May 6, 2011 and is no longer outstanding. One of the debt holders, the Opportunity Fund, LLC filed a lawsuit in the state of Ohio on October 15, 2010 to recover $120,000 and $33,000 (total of $153,000) plus interest of 15% for two short term bridge loans that are in default. These amounts have already been recorded on our records. On January 28, 2011, we received notification of a lawsuit filed by Vintage Filings, LLC in the state of Florida on December 30, 2010 to recover $7,507, together with interest, for past due services. We have already recorded $7,384 of the total in our records. We expect to resolve this matter as soon as practical., although there is no guarantee. The Company’s convertible note obligations totaled $4,389,164 in principal at June 30, 2011, as set forth on Schedule 5(d). The Company secured a waiver of any event of default from the majority of note holders of the total $4,389,164 at or before Closing. SCHEDULE 5(o) Undisclosed Liabilities None. SCHEDULE 5(w) Transfer Agent The current transfer agent is Pacific Stock Transfer
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