Solar Park Initiatives, Inc. - FORM 10-Q/A - XML - IDEA: XBRL DOCUMENT - September 14, 2011
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CONVERTIBLE DEBT
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9 Months Ended | ||
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Jun. 30, 2011
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| Debt Disclosure [Abstract] | |||
| CONVERTIBLE DEBT |
During January 2011 the Company entered into a one year convertible note agreement for $100,000 at a rate of 7.5% due in twelve months. The note holder can convert at any time on the then current market rate.
On February 7, 2011, the Company entered into a Securities Purchase Agreement with Asher Enterprises, Inc. ("Asher"), for the sale of an 8% convertible note in the principal amount of $60,000 (the "Asher Note 1"). The financing closed on February 10, 2011. The beneficial conversion discount on the note is $27,065 of which $21,427 has been amortized as of June 30, 2011. There were also $3,000 of loan fees of which $2,500 has been amortized as of June 30, 2011.
The Asher Note 1 bears interest at the rate of 8% per annum. All interest and principal must be repaid on November 9, 2011. The Asher Note 1 is convertible into common stock, at Asher’s option, at a 39% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion. In the event the Company prepays the Asher Note 1 in full, the Company is required to pay off all principal, interest and any other amounts owing multiplied by (i) 130% if prepaid during the period commencing on the closing date through 90 days thereafter, (ii) 135% if prepaid 91 days following the closing through 120 days following the closing, (iii) 140% if prepaid 121 days following the closing through 151 days following the closing and (iv) 150% if prepaid 151 days following the closing through 180 days following the closing. After the expiration of 180 days following the date of the Asher Note 1, the Company has no right of prepayment.
Asher has agreed to restrict its ability to convert the Asher Note 1 and receive shares of common stock such that the number of shares of common stock held by them in the aggregate and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock. The total net proceeds the Company received from this offering on February 7, 2011 was $57,000.
On March 29, 2011, the Company entered into a Securities Purchase Agreement with Asher Enterprises, Inc. ("Asher"), for the sale of an 8% convertible note in the principal amount of $37,500 (the "Asher Note 2"). The financing closed on March 29, 2011. The beneficial conversion discount on the note is $11,939 of which $6,996 has been amortized as of June 30, 2011. There were also $2,500 of loan fees of which $1,458 has been amortized as of June 30, 2011.
The Asher Note 2 bears interest at the rate of 8% per annum. All interest and principal must be paid on December 19, 2011. The Asher Note 2 is convertible into common stock, at Asher’s option, at a 39% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion. In the event the Company prepays the Asher Note 2 in full, the Company is required to pay off all principal, interest and any other amounts owing multiplied by (i) 130% if prepaid during the period commencing on the closing date through 90 days thereafter, (ii) 135% if prepaid 91 days following the closing through 120 days following the closing, (iii) 140% if prepaid 121 days following the closing through 151 days following the closing and (iv) 150% if prepaid 151 days following the closing through 180 days following the closing. After the expiration of 180 days following the date of the Asher Note 2, the Company has no right of prepayment.
On April 7, 2011, the Company entered into a Securities Purchase Agreement with JDF Capital, Inc. ("JDF"), for the sale of an 12% convertible promissory note in the principal amount of $100,000 (the "JDF Note"). The financing closed on April 9, 2011. The beneficial conversion discount on the JDF Note is $40,000 of which $18,444 has been amortized as of June 30, 2011. There were also $5,000 of loan fees of which $2,500 has been amortized as of June 30, 2011.
The JDF Note bears interest at the rate of 12% per annum. All interest and principal must be paid on April 5, 2012. The JDF Note is convertible into common stock, at JDF’s option, at a 40% discount to the average of the three lowest closing bid prices of the common stock during the 20 trading day period ending one day prior to conversion. The JDF Note contains a prepayment option whereby the Company may make a payment to JDF equal to 150% of all amounts owed under the Note during the one hundred fifty (150) day period beginning on the date of issuance of the JDF Note and expiring on the 150 day anniversary.
The Company claims an exemption from the registration requirements of the Securities Act of 1933, as amended (the "Act") for the private placement of these securities pursuant to Section 4(2) of the Act and/or Regulation D promulgated there under since, among other things, the transaction did not involve a public offering, Asher is an accredited investor, Asher had access to information about the Company and their investment, Asher took the securities for investment and not resale, and the Company took appropriate measures to restrict the transfer of the securities.
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