NOTE
1 – NATURE OF OPERATIONS
DESCRIPTION
OF BUSINESS AND HISTORY
The
Company was incorporated on October 26, 2009 in the State of Nevada. The Company is an exploration stage corporation and is engaged
in the search mineral deposits or reserves which are not in the development or production stage. The Company intends to explore
for oil and gas on its mining property.
The Company does not have any revenues
and has incurred losses since inception. Currently, the Company has no operations, has been issued a going concern opinion and
relies upon the sale of our securities and loans from its sole officer and director to fund operations.
GOING CONCERN - These financial statements
have been prepared on a going concern basis, which implies Viva Entertainment Group, Inc. (F/K/A Black River Petroleum Corp.) will
continue to meet its obligations and continue its operations for the next fiscal year. Realization value may be substantially
different from carrying values as shown and these financial statements do not include any adjustments to the recoverability and
classification of recorded asset amounts and classification of liabilities that might be necessary should Viva Entertainment Group,
Inc. (F/K/A Black River Petroleum Corp.) be unable to continue as a going concern. As at April 30, 2015 and October
31, 2014, Viva Entertainment Group, Inc. (F/K/A Black River Petroleum Corp.) has a working capital deficiency, has an accumulated
deficit of $4,684,087 and $4,393,053, respectively. The continuation of Viva Entertainment Group, Inc. (F/K/A Black
River Petroleum Corp.) as a going concern is dependent upon the continued financial support from its shareholders, the ability
of Viva Entertainment Group, Inc. (F/K/A Black River Petroleum Corp.) to obtain necessary equity financing to continue operations,
and the attainment of profitable operations. These factors raise substantial doubt regarding the Viva Entertainment
Group, Inc. (F/K/A Black River Petroleum Corp.) ability to continue as a going concern.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION - The accompanying
unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted
in the United States for interim information Regulation S-K. Accordingly, they do not include all of the information and footnotes
required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of
management, all adjustments consisting of a normal and recurring nature considered necessary for a fair presentation have been
included. Operating results for the six-month period ended April 30, 2015 may not necessarily be indicative of the results that
may be expected for the year ending October 31, 2015.
USE OF ESTIMATES - The preparation
of financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported
amounts of net revenue and expenses in the reporting period. We regularly evaluate our estimates and assumptions related to the
useful life and recoverability of long-lived assets, stock-based compensation and deferred income tax asset valuation allowances.
We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be
reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets
and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced
by us may differ materially and adversely from our estimates. To the extent there are material differences between our estimates
and the actual results, our future results of operations will be affected.
CASH AND CASH EQUIVALENTS - The Company
considers all highly liquid instruments with original maturities of three months or less when acquired, to be cash equivalents. We
had no cash equivalents at April 30, 2015 and October 31, 2014.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES –
Continued
IMPUTED INTEREST – The Company
calculates imputed interest at a rate of 8% per annum. There was $742 and $2,135 imputed interest recorded as donated capital for
the six months ended April 30, 2015 and 2014, respectively.
IMPAIRMENT POLICY – In 2013, the
Company authorized the issuance of 5,000,000 shares of restricted shares of common stock and paid $10,000 for the mineral property.
At October 31, 2013, the Company did an assessment of whether this payment would meet the characteristics required to record it
as an asset at year-end and determined that an impairment charge of $2,500,000 should be reflected as of October 31, 2013 because
the Company could not substantiate that there would be a future economic benefit arising from this payment. During the year ended
October 31, 2014 the Company impaired a $150,000 deposit on a lease.
INCOME TAXES -
The Company
accounts for income taxes under the provisions issued by the FASB which requires recognition of deferred tax liabilities and assets
for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns.
Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and
tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
The Company computes tax asset benefits for net operating losses carried forward. The potential benefit of net operating losses
has not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will
utilize the net operating losses carried forward in future years.
MINERAL CLAIM EXPENDITURES – The
Company capitalizes all direct costs related to the acquisition and exploration of specific mining properties as incurred. These
costs will be amortized against the income generated from the property. If the property is abandoned or impaired, an appropriate
impairment charge will be made.
LOSS PER COMMON SHARE
-
The
Company reports net loss per share in accordance with provisions of the FASB. The provisions require dual presentation
of basic and diluted loss per share. Basic net loss per share excludes the impact of common stock equivalents. Diluted net loss
per share utilizes the average market price per share when applying the treasury stock method in determining common stock equivalents.
As of April 30, 2015 and April 30, 2014, there were no common stock equivalents outstanding.
FAIR VALUE OF FINANCIAL INSTRUMENTS
- Pursuant to ASC No. 820, “Fair Value Measurements and Disclosures”, the Company is required to estimate the fair
value of all financial instruments included on its balance sheet as of April 30, 2015 and October 31, 2014. The Company’s
financial instruments consist of cash. The Company considers the carrying value of such amounts in the financial statements
to approximate their fair value due to the short-term nature of these financial instruments.
RECENTLY ISSUED ACCOUNTING STANDARDS
– In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “
Revenue from Contracts
with Customers”.
The update gives entities a single comprehensive model to use in reporting information about the amount
and timing of revenue resulting from contracts to provide goods or services to customers. The proposed ASU, which would apply to
any entity that enters into contracts to provide goods or services, would supersede the revenue recognition requirements in Topic
605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally,
the update would supersede some cost guidance included in Subtopic 605-35, Revenue Recognition – Construction-Type and Production-Type
Contracts. The update removes inconsistencies and weaknesses in revenue requirements and provides a more robust framework for addressing
revenue issues and more useful information to users of financial statements through improved disclosure requirements. In addition,
the update improves comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets
and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. The
update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting
period. This updated guidance is not expected to have a material impact on our results of operations, cash flows or financial condition.
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES –
Continued
In June 2014, ASU No. 2014-12, “
Compensation
– Stock Compensation (Topic 718); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance
Target Could Be Achieved after the Requisite Service Period”.
The amendments in this ASU apply to all reporting entities
that grant their employees share-based payments in which the terms of the award provide that a performance target that affects
vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting
and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should
apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such
awards. For all entities, the amendments in this ASU are effective for annual periods and interim periods within those annual periods
beginning after December 15, 2015. Earlier adoption is permitted. The effective date is the same for both public business entities
and all other entities.
Entities may apply the amendments in
this ASU either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards
with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements
and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this Update
as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to
the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight
in measuring and recognizing the compensation cost. This updated guidance is not expected to have a material impact on our results
of operations, cash flows or financial condition.
In August 2014, the FASB issued ASU
No. 2014-15 on “
Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties
about an Entity’s Ability to Continue as a Going Concern
”. This Update provides guidance about management’s
responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or
to provide related footnote disclosures. The amendments require management to assess an entity’s ability to continue as a
going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. The amendments
in this Update are effective for public and nonpublic entities for annual periods ending after December 15, 2016. We are currently
assessing the impact of the adoption of ASU No. 2014-15, and we have not yet determined the effect of the standard on our ongoing
financial reporting.
In July 2015, FASB issued ASU No. 2015-11,
“Inventory (Topic 330): Simplifying the Measurement of Inventory” more closely align the measurement of inventory in
GAAP with the measurement of inventory in International Financial Reporting Standards (IFRS). The amendments in this ASU
do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply
to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. An entity should
measure inventory within the scope of this Update at the lower of cost and net realizable value. Net realizable value is the estimated
selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.
Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. For public business entities,
this ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years.
For all other entities, this ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal
years beginning after December 15, 2017. The amendments in this ASU should be applied prospectively with earlier application permitted
as of the beginning of an interim or annual reporting period. We are currently reviewing the provisions of this ASU to determine
if there will be any impact on our results of operations, cash flows or financial condition.
In August 2015, FASB issued ASU No.2015-14,
“Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” defers the effective date ASU No.
2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans
should apply the guidance in Update 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting
periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December
15, 2016, including interim reporting periods within that reporting period. All other entities should apply the guidance in Update
2014-09 to annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods
beginning after December 15, 2019. All other entities may apply the guidance in ASU No. 2014-09 earlier as of an annual reporting
period beginning after December 15, 2016, including interim reporting periods within that reporting period. All other entities
also may apply the guidance in Update 2014-09 earlier as of an annual reporting period beginning after December 15, 2016, and interim
reporting periods within annual reporting periods beginning one year after the annual reporting period in which the entity first
applies the guidance in ASU No. 2014-09. We are currently reviewing the provisions of this ASU to determine if there will be any
impact on our results of operations, cash flows or financial condition.
All other newly issued accounting pronouncements
but not yet effective have been deemed either immaterial or not applicable.
NOTE
3 – FAIR VALUE MEASUREMENTS
The Company adopted ASC No. 820-10
(ASC 820-10), Fair Value Measurements. ASC 820-10 relates to financial assets and financial liabilities.
ASC 820-10 defines fair value, establishes
a framework for measuring fair value in accounting principles generally accepted in the United States of America (GAAP), and expands
disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require
or permit fair value measurements and are to be applied prospectively with limited exceptions.
ASC 820-10 defines fair value as the
price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. This standard is now the single source in GAAP for the definition of fair value, except for the fair value
of leased property as defined in SFAS 13. ASC 820-10 establishes a fair value hierarchy that distinguishes between (1) market
participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s
own assumptions, about market participant assumptions, that are developed based on the best information available in the circumstances
(unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level
3). The three levels of the fair value hierarchy under ASC 820-10 are described below:
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Level 1
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Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
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Level 2
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Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
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Level 3
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Inputs that are both significant to the fair value measurement and unobservable. These inputs rely on management's own assumptions about the assumptions that market participants would use in pricing the asset or liability. (The unobservable inputs are developed based on the best information available in the circumstances and July include the Company's own data.)
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The following presents the Company's
fair value hierarchy for those assets and liabilities measured at fair value on a non-recurring basis as of April 30, 2015 and
October 31, 2014:
Level 1: None
Level 2: None
Level 3: None
Total Gain (Losses): None
NOTE 4
- RELATED PARTY TRANSACTIONS
During the six months ended April
30, 2015 and 2014 the Company recognized a total of $3,000 and $3,000, respectively for rent. These transactions are recorded
at the exchange amount which is the amount agreed to by the transacting parties.
On December 1, 2013, the Company entered
into an employment agreement with Alexander Stanbury, the Company’s President, Chief Executive Officer, Secretary, Treasurer,
Chief Financial Officer and sole member of the Board of Directors (the “Employment Agreement”).
Pursuant to the Employment
Agreement, Mr. Stanbury will receive annual base compensation of $120,000, which may be increased but not decreased from time
to time as determined by the Board of Directors of the Company. Mr. Stanbury is entitled to receive 3,000,000 shares (the
“Employment Shares”) of the Company’s Common Stock, 1,000,000 to vest on the date of the Employment
Agreement, 1,000,000 to vest on the first anniversary of the Employment Agreement, and 1,000,000 to vest on the second
anniversary of the Employment Agreement. The Employment Agreement also provides for bonus awards, as well as a benefit
package, including medical, disability, and other equity programs. The term of the Employment Agreement is three (3) years
and shall automatically be renewed for successive one (1) year terms thereafter, unless otherwise notified in writing three
(3) months prior to the termination of the agreement. As of April 30, 2015 and October 31, 2014, 2,161,004 and 1,665,014
shares have been vested. Compensation expense was $225,000 and $667,677, respectively was recorded during the six months
ended April 30, 2015 and 2014, based on the closing price of the shares on the date of grant.
The Employment Agreement may be terminated
by the Company and by Mr. Stanbury. Should the Employment Agreement be terminated by the Company without cause, by Mr. Stanbury
for good reason, or pursuant to a change of control, Mr. Stanbury is entitled to receive one times his base salary and other benefits
at the time of termination (including any bonus); any earned but unpaid base salary, and accrued but unpaid vacation time. Should
the Employment Agreement be terminated by the Company for cause or by Mr. Stanbury other than for good reason, Mr. Stanbury is
entitled to receive any earned but unpaid base salary, including any bonus and accrued but unpaid vacation time.
During the six months ended April 30, 2015 and 2014
the Company President and Director advanced the Company a total of $50,000 and $-0-, respectively to fund operations and
repaid a total of $7,146 and $-0-, respectively. As of April 30, 2015 the Company owes him a total of $42,854.
NOTE 5
– LEASE OF OIL AND GAS CLAIMS
On October 17, 2013, the company entered
into an agreement with American Land and Exploration Company (“American Land”) to purchase 100% working interest in
the 1,840.69 M/L acres in the oil and gas leases in Henderson, Tennessee. The Company agreed to pay $250,000 as follows:
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$25,000 within 10 days of the agreement (paid)
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$25,000 within 45 days of the agreement (paid)
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$100,000 within 135 days of the agreement (paid)
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$100,000 within 225 days of the agreement. (not paid)
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The final payment of $100,000 is currently
past due, and the Company is in the process of negotiating amendments to the agreement, which will extend the final payment to
December 2014. A final agreement has not been reached as of the date of this Report. As of October 31, 2014 the Company impaired
the amount paid of $150,000.
American Land will hold the lease interest
in trust for Black River Petroleum Corp. until such time as the agreement is completed or terminated. In the event of non-payment,
the Company will forfeit its lease interest. American Land is entitled to receive a 7.5% royalty on all production.
The Company has an option to purchase
additional 2,000 acres within a 5 mile radius of the property for $100,000 with 315 days of the date of the agreement.
NOTE 6
– IMPAIRMENT OF MINING CLAIMS
Mineral property claims are tested
for impairment when facts and circumstances suggest that the carrying amount of the mineral property interests exceed their recoverable
amounts. The Company has determined that due to present market conditions, it was necessary to record an impairment of the carrying
value of its Ridgestake Copper-Gold Prospect property as at October 31, 2013. The non-cash loss attributable to the impairment
is $2,500,000.
On October 17, 2013, the company entered
into an agreement with American Land and Exploration Company (“American Land”) to purchase 100% working interest in
the 1,840.69 M/L acres in the oil and gas leases in Henderson, Tennessee. The Company agreed to pay $250,000 as follows:
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$25,000 within 10 days of the agreement (paid)
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$25,000 within 45 days of the agreement (paid)
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$100,000 within 135 days of the agreement (paid)
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$100,000 within 225 days of the agreement. (not paid)
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The final payment was not paid as of
October 31, 2014 and no agreement was reached to amend the agreement as of the report date, therefore the Company impaired the
amount paid of $150,000.
NOTE 7
- COMMON STOCK
On
January 8, 2014, the company entered into an agreement to sell 246,913 common shares for total proceeds of $100,000.
On
February 1, 2014, the company entered into an agreement to sell 370,370 common shares for total proceeds of $150,000.
On
March 1, 2014, the company entered into an agreement to sell 148,148 common shares for total proceeds of $60,000.
On
April 3, 2014, the company entered into an Employment Agreement with Tim Gognat. Pursuant to the agreement, Tim Gognat is entitled
to receive 150,000 of the company’s common stock on the date of the agreement.
As
of October 31, 2014, 150,000 shares have been issued with 128,689 vested. The value of the vested shares $76,500 was based on
the closing price of the stock on the date of the agreement. The share issuance was forgiven during the year ended October 31,
2014
On
August 12, 2014, the company entered into an agreement to sell 68,376 common shares for total proceeds of $40,000.
As
of October 31, 2014 and as of April 30, 2015, 1,663,014 common shares have vested as per Employment Agreement with
Mr. Stanbury. As of October 31, 2014, the shares have not yet been issued. The value of the shares $937,356 was based on
the closing price of the stock on the date of grant and is recorded as a stock payable. No expense recognition occurred for
the six months ended April 30, 2015.
As
of April 30, 2015 and October 31, 2014, the Company has issued
73,231,067 and 73,231,067, respectively common shares.
Included in the accompanying
condensed statements of operations for the six months ending April 30, 2015 and 2014 is $225,000 and $667,677,
respectively, wages expense for vesting of the 3,000,000 common shares that are payable to Alex Stanbury as part of his
employment agreement.
NOTE 8
– SUBSEQUENT EVENTS
On April 5, 2016 The Company completed
the purchase from EMS Find, Inc. (“EMS”) of Viva Entertainment Group, Inc. (“Viva Entertainment”), a Delaware
corporation and a subsidiary of EMS, pursuant to a stock purchase agreement (“Stock Purchase Agreement”), and Viva
Entertainment’s Chief Executive Officer, Johnny Falcones, resigned from all positions at EMS and has been elected as our
sole director and President and Chief Executive Officer to manage the development and marketing of Viva Entertainment’s over
the top (IPTV/OTT) application for connected tv’s, desktop computers, tablets, and smart phones.
The above mentioned stock exchange
transaction will be accounted for as a reverse acquisition and recapitalization of the Company whereby Viva Entertainment Group,
Inc. (F/K/A Black River Petroleum Corp.) is deemed to be the accounting acquirer (legal acquiree) and the Company to be the accounting
acquiree (legal acquirer). The financial statements are in substance those of Viva Entertainment Group, Inc., with the assets and
liabilities, and revenues and expenses, of Viva Entertainment Group, Inc., will be included effective from the date of stock exchange
transaction. Viva Entertainment Group, Inc., is deemed to be a continuation of the business. Accordingly, the financial statements
will include the following:
(1) The balance
sheet consists of the net assets of the accounting acquirer at historical cost and the net assets of the accounting acquiree at
historical cost;
(2) the financial
position, results of operations, and cash flows of the acquirer for all periods presented as if the recapitalization had occurred
at the beginning of the earliest period presented and the operations of the accounting acquiree from the date of stock exchange
transaction.
Pursuant to the Stock Purchase
Agreement, the Company and EMS agreed to transfer control of Viva Entertainment to the Company through the purchase from the Seller
by the Purchaser of all 800 outstanding shares of stock of Viva Entertainment to the Company in exchange for the issuance to EMS
of a 10% promissory note in the principal amount of $100,000, due six months from the Closing (the “EMS Note”), which
represents the purchase price paid by the Company for Viva Entertainment. In connection with the closing, Alexander Stanbury,
our former President and Chief Executive Officer, transferred to Johnny Falcones 26,629,371 shares of restricted common stock of
the Company from the shares of common stock owned by Mr. Stanbury in exchange for payment of $93,625 from the $135,000 of financing
arranged with Essex Global Investment Corp. for the acquisition of the Company (the “Acquisition Financing Facility”).
On April 6, 2016, the Company
closed on the $135,000 Acquisition Financing Facility pursuant to a securities purchase agreement, dated April 6, 2016 (the "Essex
Securities Purchase Agreement"), with Essex Global Investment Corp, a Nevada corporation ("Essex"), for the sale
of a convertible promissory note (the "Essex Note") in the principal amount of $145,000, with an original issue discount
of $10,000.
The Essex Note, which is due on
March 30, 2017, bears interest at the rate of 10% per annum. All principal and accrued interest on the Note is convertible at any
time into shares of the Company's common stock at the election of Essex at a conversion price for each share of Common Stock equal
to 55%
of the lowest reported trading price of the Company’s common stock for the twenty prior
trading days
including the day upon which the conversion notice is received by the Company or its transfer agent. The conversion price discount
will be decreased to 45% if the Company experiences a DTC "chill" on its shares. If the Company is not current
within 90 days from the date of the Note, the conversion discount will increase by 20%, so that the conversion price would be 35%
of the trading price as calculated above.
The Company has the right to prepay
the Essex Note during the first six months following the date of issuance of the Essex Note with a premium of up to 135% of all
amounts owed to Essex, including default interest, depending upon when the prepayment is effectuated. The Essex Note may not be
redeemed after 180 days.
The Essex Note contains default
events which, if triggered and not timely cured, will result in default interest and penalties.
On April 8, 2016, in connection
with the purchase of Viva Entertainment Group, Inc., our Board of Directors authorized the issuance of an aggregate of 37,820,629
shares of common stock, comprised of 22,000,000 issued to our Founder and Chief Executive Officer (5,000,000 of which are registered
in name of the wife of the CEO), 13,820,629 as common shares for consulting services to various consultants and 2,000,000 common
shares as consideration for an investor entering into a share purchase agreement. An additional 500,000 common shares was issued
for general corporate purposes.