UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-Q





(Mark One)


[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the quarterly period ended September 30, 2015





[  ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the transition period from _______ to _______





Commission File Number: 000-55115





EVENTURE INTERACTIVE, INC.(Exact name of registrant as specified in its charter)





Nevada

27-4387595(State or other jurisdiction of incorporation)

(I.R.S. Employer Identification No.)





3420 Bristol Street, 6th Floor, Costa Mesa, CA 92626


(Address of principal executive offices)





855.986.5669


(Registrant’s telephone number, including area code)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Yes  [X] No  [ ]





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [   ]No  [   ]





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.





Large accelerated filer                                                             [  ]

Accelerated filer                                                                                    [  ]
Non-accelerated filer                                                               [  ]

Smaller reporting company                                                                 [X](Do not check if a smaller Reporting company)





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  [ ]No  [X]





There were 1,101,066,432shares of the issuer’s common stock outstanding as of November 23, 2015.


Table of Contents


EVENTURE INTERACTIVE, INC.





FORM 10-Q


FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2015




TABLE OF CONTENTS





PAGEPART I - FINANCIAL INFORMATIONItem 1.
Financial Statements


3Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations


33Item 3.
Quantitative and Qualitative Disclosures About Market Risk


38Item 4.
Controls and Procedures


38PART II - OTHER INFORMATIONItem 1.
Legal Proceedings


39Item 1A.
Risk Factors


39Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds


39Item 3.
Defaults Upon Senior Securities


41Item 4.
Mine Safety Disclosures


41Item 5.
Other Information


41Item 6.
Exhibits


43SIGNATURES


44





Table of Contents
 2


PART I – FINANCIAL INFORMATION





ITEM 1. FINANCIAL STATEMENTS





PAGEConsolidated Balance Sheets as of September 30, 2015 and December 31, 2014 (unaudited)


4Consolidated Statements of Operations for the three and nine months ended September 30, 2015 and 2014 (unaudited)


5Consolidated Statements of Cash Flows for the nine months ended September  30, 2015 and 2014 (unaudited)


6Notes to Consolidated Financial Statements (unaudited)


7 to 32


Table of Contents
 3


EVENTURE INTERACTIVE, INC.


CONSOLIDATED BALANCE SHEETS


(UNAUDITED)




September 30,

2015


December 31,

2014ASSETSCurrent AssetsCash

$
22,447


$
2,957Deposits


15,196



15,196Total current assets


37,643



18,153Fixed assets, net


44,385



52,782Total assets

$
82,028


$
70,935LIABILITIES AND STOCKHOLDERS' DEFICITCurrent LiabilitiesAccounts payable

$
856,320


$
400,323Accrued expenses


56,103



924,372Related party payables


161,380



–Related party notes payable


123,458



555,250Notes payable, net of discount of $0 and $2,889, respectively


-



147,111Convertible notes payable, net of discount of $1,237,764 and $168,000, respectively


259,650



6,000Derivative liabilities – current


3,245,974



177,149Total current liabilities


4,702,885



2,210,205Derivative liabilities – non-current


249,574



328,044Total liabilities


4,952,459



2,538,249Commitments and contingenciesStockholders’ DeficitPreferred stock, $0.001 par value, 10,000,000 authorized, 5,000,000 and -0- shares of Series A issued and outstanding, respectively


5,000



–Common stock, $0.001 par value, 10,000,000,000 shares authorized; 672,891,024 and 25,481,323 shares issued and outstanding, respectively


672,891



25,481Subscriptions receivable


(17,000
)


–Additional paid-in capital


35,270,154



25,242,130Accumulated deficit


(40,801,476
)


(27,734,925
)Total stockholders’ deficit


(4,870,431
)


(2,467,314
)Total liabilities and stockholders’ deficit

$
82,028


$
70,935





The accompanying notes are an integral part of these unaudited consolidated financial statements.





Table of Contents
 4


EVENTURE INTERACTIVE, INC.


CONSOLIDATED STATEMENTS OF OPERATIONS


(UNAUDITED)





Three Months Ended September 30,

2015


Three Months Ended September 30,

2014


Nine Months Ended September 30,

2015


Nine Months Ended September 30,

2014Revenues

$
(1,098
)

$
–


$
(750
)

$
–General and administrative expenses


1,322,644



1,838,057



7,525,985



20,606,293Operating loss


(1,323,742
)


(1,838,057
)


(7,526,735
)


(20,606,293
)Other income (expense):Change in fair value of derivative liabilities


(1,544,078
)


1,186,483



(1,966,358
)


(2,021,531
)Day-one loss


(1,702,672
)


-



(1,702,672
)


-Interest expense


(710,892
)


–



(1,090,683
)


–Loss on debt extinguishment


(781,466
)


–



(780,103
)


–Total other income (expense)


(4,739,108
)


1,186,483



(5,539,816
)


(2,021,531
)Net loss

$
(6,062,850
)

$
(651,574
)

$
(13,066,551
)

$
(22,807,824
)Loss per common share – basic and diluted

$
(0.02
)

$
(0.03
)

$
(0.06
)

$
(1.00
)Weighted average number of common shares outstanding – basic and diluted


307,131,764



24,332,098



232,311,370



22,821,543





The accompanying notes are an integral part of these unaudited consolidated financial statements.





Table of Contents
 5


EVENTURE INTERACTIVE, INC.


CONSOLIDATED STATEMENTS OF CASH FLOWS


(UNAUDITED)





Nine Months Ended

September 30,2015


2014Cash flows from operating activitiesNet loss

$
(13,066,551
)

$
(22,807,824
)Adjustments to reconcile net loss to net cash used in operating activities:Stock-based compensation


5,124,731



18,922,507Change in fair value of derivative liabilities


3,669,030



2,201,531Depreciation and amortization expense


22,123



14,559Amortization of debt discount on notes


1,019,530



–Loss on debt extinguishment


780,104Changes in operating assets and liabilities:Deposits


–



(10,196
)Accounts payable


495,506



149,405Accrued expenses


98,512



272,669Net cash used in operating activities


(1,857,015
)


(1,255,630
)Cash flows from investing activitiesPayments for software development costs


–



(468,450
)Acquisition of fixed assets


(13,725
)


(36,185
)Net cash used in investing activities


(13,725
)


(504,635
)Cash flows from financing activitiesProceeds from related party loans


91,000



545,107Repayments of related party loans


(112,400
)


(120,107
)Related party advances


161,380



–Proceeds from convertible notes


1,442,250



–Proceeds from sale of common stock and warrants


308,000



1,275,000Net cash provided by financing activities


1,890,230



1,700,000Net change in cash


19,490



(60,265
)Cash at beginning of the period


2,957



67,762Cash at end of the period

$
22,447


$
7,497Supplemental disclosure of cash flow information:Cash paid for:Income taxes

$
–


$
–Interest

$
–


$
100Noncash investing and financing transactions:Original issue discount on issuance of convertible notes

$
473,944


$
–Settlement of related party debt with convertible debt

$
150,000


$
–Settlement of debt with convertible debt

$
50,000Conversion of convertible debt and accrued interest to common stock

$
798,130


$
–Debt discount – variable conversion feature derivative liabilities

$
2,321,296


$
–Debt discount – common stock and warrants

$
18,115


$
–Issuance of common stock for related party notes payable and interest

$
362,105


$
–Issuance of common stock to settle accrued expenses

$
918,184


$
–Stock subscriptions receivable

$
17,000


$
–Fair value of warrant derivative liabilities issued in common stock offering

$
-


$
449,624





The accompanying notes are an integral part of these unaudited consolidated financial statements.





Table of Contents
 6


EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





1. ORGANIZATION AND BUSINESS OPERATIONS





The Company was incorporated in the State of Nevada on November 29, 2010. The Company was in the GPS tracking system business until late in 2012, when the Company redirected all of its efforts into the social media business. On February 20, 2013, the Company filed Amended and Restated Articles of Incorporation with the Nevada Secretary of State to change its name from Live Event Media, Inc. to Eventure Interactive, Inc. (the “Company”).





Going Concern





The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $40,801,476 as of September 30, 2015 and further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from business operations when they come due. Management intends to finance its operating costs over the next twelve months with existing cash on hand and loans from directors and/or the private placement of common stock. These financials do not include any adjustments relating to the recoverability and reclassification of recorded asset amounts, or amounts and classifications of liabilities that might result from this uncertainty.





2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Basis of Presentation





The accompanying unaudited interim consolidated financial statements of Eventure Interactive, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s latest Annual Report on Form 10-K filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent year ended December 31, 2014, as reported in Form 10-K, have been omitted.





Principles of Consolidation





The financial statements include the accounts of the Company and its subsidiary. Intercompany transactions and balances have been eliminated.





Use of Estimates and Assumptions





The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes 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 the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.


Table of Contents
 7


EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)





Basic and Diluted Loss Per Common Share





Basic loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per common share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per common share excludes all potential common shares if their effect is anti-dilutive.





Since the Company is in a loss position, it has excluded stock options and warrants from its calculation of diluted net loss per common share. At September 30, 2015, the Company had 9,131,216 stock options, 12,576,452 warrants and 1,922,712,128 shares issuable upon the conversion of convertible debt that would have been included in its calculation of diluted net loss per common share if they were not anti-dilutive.





Software Development Costs





Costs incurred in the research and development of new software products are expensed as incurred until technological feasibility has been established. After technological feasibility is established, any additional costs are capitalized in accordance with authoritative guidance until the product is available for general release.





Fixed Assets





Fixed assets are stated at cost and depreciated using the straight-line method over the estimated useful life of the asset. The Company’s fixed assets are comprised of computer equipment and the estimated life of computer equipment is three years.





Derivative Liabilities





The Company reviews the terms of the common stock, convertible debt and warrants it issues to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments.





Bifurcated embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. The Company uses a Black-Scholes model for valuation of the derivative instrument.





Stock-Based Compensation





The Company measures stock-based compensation cost at the grant date based on the fair value of the award and recognize it as expense, over the vesting or service period, as applicable, of the stock award using the straight-line method.





Fair Value Measurements





As defined in FASB ASC Topic No. 820 – 10, fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC Topic No. 820 – 10 requires disclosure that establishes a framework for measuring fair value and expands disclosure about fair value measurements. The statement requires fair value measurements be classified and disclosed in one of the following categories:


Table of Contents
 8


EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)





Fair Value Measurements (cont’d)





Level 1:
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.





Level 2:
Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that the Company values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instruments, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace.





Level 3:
Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). The Company’s valuation models are primarily industry standard models. Level 3 instruments include derivative warrant instruments. The Company does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 1 or Level 2.





Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The estimated fair value of the derivative liabilities were calculated using the Black Scholes model.





New Accounting Pronouncements





The Company’s management does not believe that any other recently issued pronouncements will have a material effect on the Company’s financial statements.





3. RELATED PARTY TRANSACTIONS





Related party payables





During the nine months ended September 30, 2015, the Company’s CFO advanced the Company $156,695 to fund the operations of the Company, the Company paid $34,500 in cash, leaving $122,195 payable as of September 30, 2015.





During the nine months ended September 30, 2015, the Company’s Chairman advanced the Company $47,829 to fund the operations of the Company, all of which was repaid in full as at September 30, 2015.





At September 30, 2015, the Company owes a related party entity $39,185 for marketing services provided to the Company during the nine months ended September 30, 2015.  The service fee was $188,147, of which the Company paid $148,962 in cash. The entity is 71% owed by a Director of the Company and 8% owned by the CFO of the Company.





Table of Contents
 9


EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





3. RELATED PARTY TRANSACTIONS (continued)





Related party notes payable





At September 30, 2015 and December 31, 2014, the Company owed its Chairman and former CEO $6,300 and $190,250, respectively, for loans provided to the Company by the Chairman. The loans bear interest at 1% per annum. During the nine month period ended September 30, 2015, the Company received $85,300 from its Chairman. During the nine months ended September 30, 2015, the Company repaid a total of $269,250 of the outstanding loans.





At September 30, 2015 and December 31, 2014, the Company owed its CFO $2,000 and $40,000, respectively, for loans provided to the Company by the CFO. The loans bear interest at 1% per annum. On February 2, 2015, an aggregate of $40,000 of related party notes payable and $143 of interest was converted into shares of our restricted common stock at a conversion price of $0.07 per share resulting in the issuance of 573,471 shares of common stock to Mr. Rountree. During the nine month period ended September 30, 2015, the Company received a further $12,000 in loans from its CFO of which $10,000 has been repaid.





At September 30, 2015 and December 31, 2014, the Company owed a Director of the Company $115,158 and $275,000, respectively, for loans provided to the Company by the Director. The amounts owed to the Director are past due and in default as at September 30, 2015. The loans bear interest at 1% per annum.





At September 30, 2015 and December 31, 2014, the Company owed $0 and $50,000 to a relative of an executive of the Company. The loans bear interest at 1% per annum. The amounts was assigned to a third party and exchanged for convertible notes. No gain or loss was recorded on the debt extinguishment.





4. NOTES PAYABLE





During August 2014, the Company received $45,000 in cash for a $50,000 promissory note due in June 2015. The promissory note has no stated interest rate. The Company is recognizing the $5,000 original issue discount as interest expense over the life of the promissory note. During the six months ended June 30, 2015, this loan was assigned to a third party and exchanged for convertible notes. No gain or loss was recorded on the debt extinguishment.





During the year ended December 31, 2014, the Company received $100,000 in cash from third parties in exchange for $100,000 of notes payable bearing interest at 1% per annum. During the nine months ended September 30, 2015, $100,000 of these notes payable was assigned to a third party and exchanged for convertible notes.





5. CONVERTIBLE NOTES PAYABLE





Convertible debt with a variable conversion feature consists of the following as of September 30, 2015 and December 31, 2014:





September 30,

2015


December 31,

2014Bluestem Advisors
(a)


48,048



-Carebourn Capital
(b)


376,081



-GHS Investments
(c)


43,253



-JMJ Financial
(d)


48,870



55,556JSJ Investments
(e)


50,000



-KBM
(f)


-



64,000LG
(g)


283,275



110,000RDW Capital
(h)


100,000



-SBI Investments
(i)


468,887



-VGI
(j)


79,000



–Total convertible notes payable


$
1,497,414


$
229,556Less: debt discount



(1,237,764
)


(223,556
)Convertible notes payable, net



259,650



6,000


Table of Contents
 10


EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





5. CONVERTIBLE NOTES PAYABLE (continued)





Convertible debt with a variable conversion feature, provided and fully converted or assigned to third parties, during the nine months ended September 30, 2015, consists of the following:





Issued During the periodAdar Bays


(k)


$
44,00Crown Bridge Partners


(l)



158,500EMA Financial


(m)



71,500FireRock


(n)



137,500Peak One


(o)



50,500Rider Capital


(p)



70,000River North


(q)



52,500Tangiers


(r)



55,000Union Capital


(s)



44,00





(a) Bluestem Advisors





On September 14, 2015, a convertible note purchase agreement was entered into between River North Equity, LLC (ref (p)) (the “Seller”) and Bluestem Advisors LLC (the “Purchaser”). Under the convertible note purchase agreement, the Seller , who held a certain convertible promissory note dated March 18, 2015(the Note”) in the original principal amount of $52,500 wishes to sell and the Purchaser wishes to purchase the Note. On September 18, 2015, the convertible note purchase agreement was closed. The Note is a 9% convertible promissory note due on March 18, 2016 in the principal amount of $52,500 and is convertible by the note holder, at its option, any time after 180 days from issuance at a conversion price equal to 60% of the lowest trading price for our common stock during the twenty trading days prior to the date on which the note holder provides us with a conversion notice. The conversion price formula will be reduced from 60% to 50% if the Company is not DWAC eligible.





During the nine month period ended September 30, 2015 Bluestem converted $32,230 of principal from the aforementioned note into an aggregate of 48,833,333 shares of common stock.





On September 30, 2015, the Company issued Bluestem a 10% convertible promissory note in the principal amount of $27,778 due September 30, 2016. The note is convertible at Bluestem’s option into common stock of the Company at a conversion price equal to 45% of the lowest bid price during the 20 trading days immediately preceding the date of conversion.





(b) Carebourn Capital





During the nine months ended September 30, 2015, the Company issued several convertible promissory notes to Carebourn Capital LLC (“Carebourn”) which are convertible at Carebourn’s option into common stock of the Company at a conversion price equal to 50% of the average of the lowest three trading prices of the Company’s common stock during the 20 trading days immediately preceding the date of conversion.





During the nine month period ended September 30, 2015 Carebourn, converted $152,760 of principal into an aggregate of 219,444,843 shares of common stock.







Table of Contents
 11


EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





5. CONVERTIBLE NOTES PAYABLE (continued)





(b) Carebourn Capital (cont’d)





Notes

# of Shares issued


Amount

converted


September 30, 2015$45,760 -10% due on January 26, 2016


54,910,676


$
45,760


$
-$101,800 -10% due on May 30, 2016


-



-



101,800$107,000 -10% due on August 6, 2016


164,534,167



107,000



-$82,000 - 10% due on August 14, 2016


-



-



82,000$132,281-10% convertible note due on June 18, 2016


-



-



132,281$60,000 -10% convertible note due on June 22, 2016


-



-



60,000219,444,843



152,760



376,081





(c) GHS Investments





On September 23, 2015, the Company issued GHS Investments, LLC (“GHS”) an 8% convertible promissory note in the principal amount of $63,412 due March 3, 2016. The note is convertible at GHS’s option into common stock of the Company at a conversion price equal to 60% of the lowest closing price during the 20 trading days immediately preceding the date of conversion. The conversion price has a floor of $0.0005.





On September 22, 2015, we entered into an Investment Agreement and Registration Rights Agreement (collectively the “Agreement”) with GHS in order to establish a source of funding. Pursuant to this Agreement, GHS will provide us with an equity line of financing of up to $7,750,000, and upon effectiveness of a Form S-1 Registration Statement. The minimum amount that we must request from GHS is $5,000 at any one time. GHS will purchase common stock from us based on the amount specified in each request for funding from GHS. Pursuant to the Equity Purchase Agreement, GHS and its affiliates will not be required to purchase shares of our common stock that would result in GHS’s beneficial ownership equaling more than 9.99% of our outstanding common stock.





(d) JMJ





On December 15, 2014, we issued a convertible promissory note in the principal amount of $55,556 to JMJ Financial (“JMJ”) due December 15, 2016 (the “JMJ Note”). The JMJ Note was subject to an original issue discount resulting in net proceeds of $50,000. The JMJ Note, including accrued interest due thereon, is convertible by JMJ, at its option, any time after 180 days from the date of issuance at a conversion price equal to the lesser of $0.16 or 60% of the average of the two lowest trading prices during the twenty trading days prior to conversion. The JMJ Note may be prepaid by us any time within 120 days from the date of issuance without payment of interest. If we do not prepay the JMJ Note within such 120 day period, a one-time interest charge of 12% will be applied to the principal amount. The JMJ Note becomes immediately due and payable upon certain events of default and subjects us to significant default penalties. JMJ may provide us with additional loans on the same terms pursuant to which JMJ would receive notes which, together with the JMJ Note, aggregate to $250,000. The JMJ Note was amended on January 16, 2015 to, among other things, remove a provision which had provided that if, at any time while the JMJ Note is outstanding, we issued securities on more favorable terms than those contained in the JMJ Note, JMJ had the option to include the more favorable terms in the JMJ Note.





On April 28, 2015, the Company issued JMJ a $27,778 convertible promissory note, of which $2,778 was an original issue discount. The note is identical, in all material respects, to the existing JMJ Note. The note has a two-year term and provides for payment of interest on the principal amount at maturity at the rate of 12% per annum. The note, including accrued interest due thereon, is convertible by JMJ, at its option, any time after 180 days from the date of issuance at a conversion price equal to the lesser of $0.16 or 60% of the average of the two lowest trading prices during the twenty trading days prior to conversion.





During the nine months ended September 30, 2015 JMJ converted $34,464 of principal into an aggregate of 9,400,000 shares of common stock.





Table of Contents
 12


EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





5. CONVERTIBLE NOTES PAYABLE (continued)





(e) JSJ Investments





On May 19, 2015, the Company issued JSJ Investments, Inc. (“JSJ”) a $50,000 convertible promissory note in the principal amount of $50,000 due February 2016. The JSJ note is convertible by JSJ, at its option, any time after 180 days from issuance at a conversion price equal to 45% of the lowest trading prices for our common stock during the twenty-day trading period prior to the date on which JSJ provides us with a conversion notice.





(f) KBM





On January 29, 2015 and December 19, 2014, the Company issued 8% convertible promissory notes to KBM Worldwide, Inc. (“KBM”) in the principal amounts of $48,000 and $64,000, respectively due November 2, 2015 and September 19, 2015, respectively, (the “KBM Notes”). The Company received cash proceeds of $44,100 and $60,000 for these notes. The KBM Notes are convertible by KBM at its option any time after 180 days from issuance at a conversion price equal to 58% of the average of the lowest three trading prices for our common stock during the ten trading day period prior to the date on which KBM provides us with a conversion notice. The KBM Notes may be prepaid by us any time within 180 days from the date of issuance at a premium ranging from 115% for a prepayment within the initial 30 days to 140% for prepayment after 150 days from the date of issuance but on or prior to 180 days from the date of issuance. The prepayment premium for the 31-60 day period is 120%, for the 61-90 day period is 125%, for the 91-120 day period is 130% and for the 121-150 day period is 135%. The KBM Notes become immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties.





On June 25, 2015, the KBM notes were assigned by the Company to SBI Investments. The assignment was treated as a debt extinguishment by the Company.





(g) LG





On December 15, 2014, the Company issued to LG Capital Funding, LLC (“LG”) an 8% convertible promissory note in the principal amount of $110,000 due December 15, 2015 (the “LG #1 Note”). The LG Note was subject to an original issue discount of $15,000 resulting in net proceeds of $95,000. The LG #1 Note is convertible by LG, at its option, any time after 180 days from the date of issuance at a conversion price equal to 62% of the lowest closing bid price for our common stock for the twenty trading days prior to the date upon which LG provides us with a notice of conversion. The LG #1 Note may be prepaid by us any time within 180 days from the date of issuance at a premium ranging from 115% for a prepayment within the initial 30 days to 145% for a prepayment after 150 days from the date of issuance but on or prior to 180 days from the date of issuance. The prepayment premium for the 31-60 day period is 121%, for the 61-90 day period is 127%, for the 91-120 day period is 133%, and for the 121-150 day period is 139%. The LG #1 Note becomes immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties.





During the nine months ended September 30, 2015, LG converted $110,000 of principal and $5,670 of interest into an aggregate of 87,115,082 shares of common stock.





On July 20, 2015 and September 3, 2015, the Company issued to LG 8% convertible promissory notes in the principal amount of $86,225 due on July 20, 2016 (“LG #2 Note), in the principal amount of $127,050 due on September 3, 2016 (“LG #3 Note) and in the principal amount of $70,000 due September 3, 2016, respectively.


Table of Contents
 13


EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





5. CONVERTIBLE NOTES PAYABLE (continued)





(g) LG (continued)





These above notes are convertible by LG, at its option, any time after 180 days from the date of issuance at a conversion price equal to 62% of the lowest closing bid price for our common stock for the twenty trading days prior to the date upon which LG provides us with a notice of conversion. The LG #12 and #3 Notes may be prepaid by us any time within 180 days from the date of issuance at a premium ranging from 115% for a prepayment within the initial 30 days to 145% for a prepayment after 150 days from the date of issuance but on or prior to 180 days from the date of issuance. The prepayment premium for the 31-60 day period is 121%, for the 61-90 day period is 127%, for the 91-120 day period is 133%, and for the 121-150 day period is 139%. The LG #2 and #3 Notes becomes immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties.





(h) RDW Capital





On July 10, 2015, the Company issued RDW Capital LLC (“RDW”) two10% convertible promissory notes in the principal amount of $100,000 due January 10, 2016 (the “RDW Notes”). The RDW Notes are convertible at RDW’s option into common stock of the Company at a conversion price equal to 50% of the lowest bid price in the 20 days immediately preceding the date of conversion.





During the nine months ended September 30, 2015, RDW converted $100,000 of principal into an aggregate of 45,332,000 shares of common stock.





(i) SBI Investments





During the nine months ended September 30, 2015, the Company issued several convertible promissory notes to SBI Investments LLC (“SBI”) with convertible at SBI’s option into common stock of the Company at a conversion price equal to 50% of the lowest bid price 20 days immediately preceding the date of conversion.





During the nine month period ended September 30, 2015 SBI converted $85,498 of principal into an aggregate of 50,066,552 shares of common stock.





Notes

# of Shares issued


Amount

converted


September 30, 2015$164,631 -8% due on June 25, 2015


50,066,552


$
85,498


$
79,133$60,369 -8% due on June 25, 2016


-



-



60,369$125,000 -8% due on June 26, 2016


-



-



125,000$50,000 - 8% due on August 6, 2016


-



-



50,000$104,385-10% convertible note due on September 21, 2016


-



-



104,385$50,000 -10% convertible note due on September 20, 2016


-



-



50,00050,066,552



85,498



468,887





(j) VGI





On April 8, 2015, we issued to Vires Group, Inc. (“VGI”), a 12% convertible promissory note in the principal amount of $38,000 due January 2016 (the “VGI Note”). The VGI Note is convertible by VGI, at its option, any time after 180 days from issuance at a conversion price equal to 50% of the average of the three lowest trading prices for our common stock during the twenty-day trading period prior to the date on which VGI provides us with a conversion notice. The VGI Note becomes immediately due and payable upon the occurrence of certain events of default and subjects the Company to significant default penalties.


Table of Contents
 14


EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





5. CONVERTIBLE NOTES PAYABLE (continued)





(j) VGI (cont’d)





On May 11, 2015, the Company issued to VGI a 12% convertible promissory note in the principal amount of $10,000 due February 13, 2016 (the “Second VGI Note”). The Second VGI Note is convertible by VGI, at its option, any time after 180 days from the date of issuance at a conversion price equal to 50% of the average of the three lowest trading prices for our common stock during the twenty-day trading period prior to the date on which VGI provides us with a conversion notice.





On June 25, 2015, the VGI notes were assigned by the Company to SBI Investments. The assignment was treated as a debt extinguishment by the Company.





On July 13, 2015, the Company issued to VGI an 8% convertible promissory note in the principal amount of $79,000 due April 14, 2016 (the “Third VGI Note”). The Third VGI Note is convertible by VGI, at its option, any time after 180 days from the date of issuance at a conversion price equal to 50% of the average of the three lowest trading prices for our common stock during the twenty-day trading period prior to the date on which VGI provides us with a conversion notice.





(k) Adar Bays





On January 23, 2015, we issued to Adar Bays, LLC (“Adar”) an 8% convertible promissory note in the principal amount of $44,000 due January 23, 2016 (the “Adar Note”). The Adar Note was subject to an original issue discount of $6,500 resulting in net proceeds of $37,500. The Adar Note, including accrued interest due thereon, is convertible by Adar, at its option, any time after 180 days from the date of issuance at a conversion price equal to 62% of the lowest closing bid price for our common stock during the twenty trading days prior to conversion. In the event that our common stock becomes subject to a DTC “chill”, the conversion price formula will be reduced from 62% to 52% while the “chill” remains in effect. The Adar Note may be prepaid by us within 180 days from the date of issuance at a premium ranging from 115% for a prepayment within the initial 30 days to 145% for a prepayment after 150 days from the date of issuance but on or prior to 180 days from the date of issuance. The prepayment premium for the 31-60 day period is 121%, for the 61-90 day period is 127%, for the 91-120 day period is 133% and for the 121-150 day period is 139%. The Adar Note becomes immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties.





On July 27, 2015, the Adar Note was assigned by the Company to Carebourn Capital LLC. The assignment was treated as a debt extinguishment by the Company.





(l) Crown Bridge Partners





On April 14, 2015, the Company issued to Crown Bridge Partners, LLC (“CBP”) a 5% convertible promissory note in the principal amount of $60,000 due April 2016 (the “CBP Note”). The CBP Note is convertible by CBP, at its option, any time after 180 days from issuance at a conversion price equal to 52% of the lowest trading prices for our common stock during the twenty-day trading period prior to the date on which CBP provides us with a conversion notice. The CBP Note becomes immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties.





On May 22, 2015, the Company issued to CBP a 5% convertible promissory note in the principal amount of $48,500 due May 2016 (the “CBP Note 2”). The CBP Note 2 is convertible by CBP, at its option, any time after 180 days from issuance at a conversion price equal to 52% of the lowest trading prices for our common stock during the twenty-day trading period prior to the date on which CBP provides us with a conversion notice. The CBP Note becomes immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties.


Table of Contents
 15


EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





5. CONVERTIBLE NOTES PAYABLE (continued)





(l) Crown Bridge Partners (continued)





On May 26, 2015, the Company issued to CBP a convertible promissory note in the principal amount of $10,000 due May 2016 (the “CBP Note 3”). The CBP Note 3 is convertible at CBP’s option into common stock of the Company at a conversion price equal to 52% of the lowest trading prices for our common stock during the twenty-day trading period prior to the date on which CBP provides us with a conversion notice. The CBP Note becomes immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties.





On June 4, 2015, the Company issued to CBP a convertible promissory note in the principal amount of $40,000 due June 2016 (the “CBP Note 4”). The CBP Note 4 is convertible at CBP’s option into common stock of the Company at a conversion price equal to 52% of the lowest trading prices for our common stock during the twenty-day trading period prior to the date on which CBP provides us with a conversion notice. The CBP Note becomes immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties.





During the nine month period ended September 30, 2015, CBP converted $50,000 of principal into an aggregate of 5,033,506 shares of common stock.





On September 18, 2015 the CBP Note 1 and CBP Note 2 were assigned by the Company to Carebourn Capital LLC. The assignment was treated as a debt extinguishment by the Company.





(m) EMA Financial





On June 1, 2015, the Company issued EMA Financials, LLC (“EMA”) a $75,000 10% convertible promissory note in the principal amount of $75,000 due June 2016. The EMA note is convertible by JSJ, at its option, any time after 180 days from issuance at a conversion price equal to the lower of the closing sale price of common stock on the principal market on the trading day immediately preceding the closing date and 50% of the lowest trading prices for our common stock during the twenty-day trading period prior to the date on which EMA provides us with a conversion notice.





On September 22, 2015 the EMA Note was assigned by the Company to SBI Investments LLC. The assignment was treated as a debt extinguishment by the Company.





(n) FireRock





On January 6, 2015, we entered into a Securities Purchase Agreement (“SPA”) with FireRock Global Opportunities Fund L.P., a Delaware limited partnership (“FireRock”), pursuant to which we issued a convertible promissory note in the principal amount of $137,500 to FireRock (the “FireRock Note”). The FireRock Note was subject to an original issue discount of $15,000 resulting in our receipt of $122,500 in net proceeds. In connection with the SPA, we also issued 250,000 shares of our restricted common stock and a five-year warrant to purchase 500,000 shares of our common stock at an exercise price of $0.50 per share to FireRock. The SPA and a related Registration Rights Agreement between us and FireRock, dated January 6, 2015, provide for us to register the shares issuable upon conversion of the FireRock Note and the exercise of the warrant. We were required to file a registration statement with respect to the shares underlying the note and warrant within 60 days of the January 6, 2015 issuance date and have such registration statement declared effective not more than 150 days following the issuance date. We filed the registration statement on March 6, 2015. The note has a six-month term and provides for payment of interest on the principal amount at maturity at the rate of 1% per annum.


Table of Contents
 16


EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





5. CONVERTIBLE NOTES PAYABLE (continued)





(n) FireRock





The note, including accrued interest thereon, can be prepaid by us, in whole or in part, at any time prior to maturity, upon three trading days’ prior written notice, at a premium of 135%. The premium rate also applies to any default interest which may be due at the time of prepayment. Default interest, at the rate of 15% per annum, will become due in the event that we fail to pay principal or interest when due on the Notes. The note is convertible at any time after issuance at the lower of (i) $0.20 per share or (ii) 60% (50% upon an Event of Default) of the volume weighted average price for our common stock during the three consecutive trading days immediately preceding the trading day on which we receive a notice of conversion. The SPA further provides that if we complete a registered primary public offering of our securities at any time during which the notes remains outstanding, that the note can be converted at the closing of such offering at a conversion price equal to a 10% discount to the offering price to investors in the offering. We are required to reserve 20,000,000 shares of our common stock to cover note conversions and register all such shares in the registration statement. We are also required to cause our transfer agent to issue and transfer shares to the holders of the Notes within one trading day of our receipt of a conversion notice. The failure to do so constitutes an Event of Default under the Notes. Other Events of Default including, but are not limited to, our failure to pay principal and interest when due, a material breach by us of any of the terms of the FireRock transaction documents, a breach of any representation or warranty made by us in the FireRock transaction documents having a material adverse effect on the holder of the Notes, our appointment of a receiver or trustee, our becoming bankrupt, our stock becoming delisted, our failure to comply with our reporting requirements under the Securities Exchange Act of 1934, our cessation of operations, our dissolution or liquidation, our failure to maintain any of our material assets, certain restatements of our financial statements, our effectuation of a reverse stock split, and certain unvacated judgments against us involving more than $50,000. Subject to applicable cure periods, the Notes become immediately due and payable upon the occurrence and during the continuation of Events of Default.





On July 7, 2015, the FireRock Note was in default due to failure to pay the principal amount and interest on the maturity date. As a result of certain default provisions contained in the note, upon default, the sum of $312,500 is required to be paid at  the discretion of FireRock, in the form of conversion into common stock.





During nine month period ended September 30, 2015, FireRock converted $205,500 of principal plus $1,297 accrued interest into an aggregate of 73,043,328 shares of common stock.





On August 6, 2015, the balance of principal in the amount of $107,000 of the FireRock Note was assigned by the Company to Carebourn Capital LLC. The assignment was treated as a debt extinguishment by the Company.





(o) Peak One





On May 12, 2015, the Company issued Peak One Opportunity Fund (“Peak One”) a $70,000 convertible promissory note in the principal amount of $70,000 due May 2018. The Peak One note is convertible at Peak One’s option into common stock of the Company at a conversion price equal to 60% of the lowest bid price 20 days immediately preceding the date of conversion. Pursuant to this agreement, the Company also issued 75,000 shares of common stock to Peak One with a fair value of $8,625 (a relative fair value of $7,000). The relative fair value of the shares issued was recorded as debt discount and will be amortized to interest expense over the term of the note.





On September 18, 2015 the Peak One note was assigned by the Company to LG Capital Funding, LLC. The assignment was treated as a debt extinguishment by the Company.








Table of Contents
 17


EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





5. CONVERTIBLE NOTES PAYABLE (continued)





(p) Rider Capital





On June 15, 2015, the Company issued Rider Capital Corporation (“Rider”) a $50,000 convertible promissory note in the principal amount of $50,000 due June 2016. The Rider note is convertible by Rider, at its option, any time after 180 days from issuance at a conversion price equal to 30% of the lowest trading prices for our common stock during the sixty-day trading period prior to the date on which Rider provides us with a conversion notice.





During June 2015, Rider converted $50,000 of principal into an aggregate of 2,634,882 shares of common stock.





(q) River North Equity





On March 18, 2015, we issued to River North Equity, LLC (“River North”) a 9% convertible promissory note in the principal amount of $52,500 (the “River North Note”). The River North Note was subject to a 10% original issue discount resulting in our receipt of $47,250 in net proceeds. The River North Note is convertible by River North, at its option, any time after 180 days from issuance at a conversion price equal to 60% of the lowest trading price for our common stock during the twenty trading days prior to the date on which River North provides us with a conversion notice. The conversion price formula will be reduced from 60% to 50% if we are not DWAC eligible. The River North Note contains a right of first refusal in favor of River North with regard to certain future borrowings by us for the term of the River North Note. The River North Note may be prepaid by us any time prior to our receipt of a conversion notice from River North in an amount equal to 105% multiplied by the sum of the then outstanding principal amount of the River North Note plus (i) accrued and unpaid interest due on the principal amount; and (ii) default interest and penalty payments, if any, due on the River North Note at the time of prepayment. The River North Note becomes immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties.





On September 14, 2015 the River North Note was assigned to Bluestem Advisors LLC. The assignment was treated as a debt extinguishment by the Company.





(r) Tangiers





On January 23, 2015, we issued a one-year 10% convertible promissory note to Tangiers Investment Group, LLC (“Tangiers”) in the principal amount of $55,000 (the “Tangiers Note”). The Tangiers Note was subject to an original issue discount of $5,000 resulting in net proceeds of $50,000. The Tangiers Note, including accrued interest due thereon, is convertible by Tangiers, at its option, any time after 180 days from the date of issuance at a conversion price equal to 52% of the lowest trading price for our common stock during the twenty trading days prior to conversion. The conversion price will be further reduced by 10% if we are placed on “chill” status with the Depository Trust Company until such “chill” is remedied and will be reduced by 5% if we are not Deposits and Withdrawal at Custodian eligible. The Tangiers Note may be prepaid by us within 180 days from the date of issuance at a premium ranging from 115% for a prepayment within the initial 30 days to 145% for a prepayment after 150 days from the date of issuance but on or prior to 180 days from the date of issuance. The prepayment premium for the 31-60 day period is 121%, for the 61-90 day period is 127%, for the 91-120 day period is 133%, and for the 121-150 day period is 139%. The Tangiers Note becomes immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties. By mutual agreement, Tangiers may provide us with additional funding on the same terms up to an aggregate principal amount of $330,000 during the 9-month period which commenced on January 23, 2015.





During July 2015, Tangiers converted $55,000 of principal into an aggregate of 32,610,499 shares of common stock.


Table of Contents
 18


EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





5. CONVERTIBLE NOTES PAYABLE (continued)





(s) Union Capital





On March 3, 2015, we issued an 8% convertible promissory note to Union Capital, LLC (“Union”) in the principal amount of $44,000 due March 3, 2016 (“Union Note”). The Note was subject to an original issue discount resulting in net proceeds of $38,000. The Note is convertible by Union, at its option, any time after 180 days from the date of issuance at a conversion price equal to 62% of the lowest closing bid price for our common stock for the twenty trading days prior to the date upon which Union provides us with a notice of conversion. The Note may be prepaid by us any time within 180 days from the date of issuance at a premium ranging from 115% for a prepayment within the initial 30 days to 145% for a prepayment after 150 days from the date of issuance but on or prior to 180 days from the date of issuance. The prepayment premium for the 31-60 day period is 121%, for the 61-90 day period is 127%, for the 91-120 day period is 133%, and for the 121-150 day period is 139%. The Note becomes immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties.





During September 2015, Union Capital converted $2,420 of principal into an aggregate of 3,132,122 shares of common stock.





On September 22, 2015 the balance of $41,580 in principal plus accrued interest in the Union Note was assigned to GHS Investments, LLC. The assignment was treated as a debt extinguishment by the Company.





Debt discount





The conversion price of the aforementioned convertible notes are based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 - 40. The fair value of the conversion features was recognized as derivative instruments at the issuance dates and are measured at fair value at each reporting period. Debt discount was recorded up to the purchase price of the notes and is amortized to interest expense over the term of the notes. The fair value of the beneficial conversion feature in excess of the principal amount allocated to the notes was expensed immediately as unrealized loss on derivative obligation.





Following is a summary of the debt discount for each of the convertible notes:





Noteholder

December 31,

2014


Discount


Debt

Extinguishment


Expense


September 30,

2015Bluestem Advisors

$
-


$
80,278


$



$
(33,974
)

$
46,304Carebourn Capital


-



528,841







(191,419
)


337,422GHS Investments


-



63,412







(21,232
)


42,180JMJ Financial


55,556



27,778



(7,100
)


(41,563
)


34,671JSJ Investments


-



50,000







(24,275
)


25,725KBM


62,800



48,000



(42,705
)


(68,095
)


-LG


105,200



283,275



(7,500
)


(129,285
)


251,690RDW Capital


-



200,000







(144,565
)


55,435SBI Investments


-



554,385







(166,517
)


387,868VGI


-



127,000



(32,552
)


(37,979
)


56,469Adar Bays


-



44,000



(22,060
)


(21,940
)


-Crown Bridge Partners


-



158,500



(112,188
)


(46,312
)


-EMA Financial


-



75,000



(52,664
)


(22,336
)


-FireRock


-



301,385



-



(301,385
)


-Peak One


-



70,000



(62,719
)


(7,281
)


-Rider Capital


-



50,000



(50,000
)


-



-River North


-



52,500



(26,680
)


(25,820
)


-Tangiers


-



55,000



-



(55,000
)


-Union Capital






44,000



(18,459
)


(25,541
)


-Total

$
223,556


$
2,813,354


$
(502,127
)

$
(1,364,519
)

$
1,237,764


Table of Contents
 19


EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





6. DERIVATIVE LIABILITIES





Warrants





Boeckmann Warrants





The Company has determined that certain warrants the Company has issued contain provisions that protect holders from future issuances of the Company’s common stock at prices below such warrants’ respective exercise prices and these provisions could result in modification of the warrants exercise price based on a variable that is not an input to the fair value of a “fixed-for-fixed” option.





The Company issued 1,800,000 warrants in connection with the issuance of 600,000 shares of common stock sold for cash during June 2014. All of the warrants vested immediately. These warrants contain anti-dilution provisions that provide for a reduction in the exercise price of such warrants in the event that future common stock (or securities convertible into or exercisable for common stock) is issued (or becomes contractually issuable) at a price per share (a “Lower Price”) that is less than the exercise price of such warrant at the relevant time. The amount of any such adjustment is determined in accordance with the provisions of the relevant warrant agreement and depends upon the number of shares of common stock issued (or deemed issued) at the Lower Price and the extent to which the Lower Price is less than the exercise price of the warrant at the relevant time. In addition, the number of shares issuable upon exercise of these warrants will be increased inversely proportional to any decrease in the exercise price, thus preserving the aggregate exercise price of the warrants both before and after any such adjustment.





VC Advisors





On May 19, 2015, we entered into an Advisory Agreement (the “VC Agreement”) with VC Advisory, LLC, a Nevada limited liability corporation (“VC”) pursuant to which VC is providing us with financial consulting services (the “Services”). (See Note 8 Commitments).  The Agreement also requires us to issue 250,000 3-year warrants to VC, each exercisable for the purchase of one share of common stock at an exercise price equal to 102% of the average of the 10 trading day value weighted average closing price for our common stock during the period immediately prior to the date of the VC Agreement. We are required to issue 1,500,000 additional warrants to VC, each exercisable for the purchase of one share of our common stock at an exercise price equal to 102% of the average of the 10 trading day value weighted average closing price for our stock during the period immediately prior to the date of the VC Agreement in the event that VC introduces us to a party during the term who provides us with financing of not less than $5,000,000 during the term or within twelve months thereafter.





The fair values of the aforementioned Boeckmann and VC warrants issued were recognized as derivative warrant instruments at issuance and are measured at fair value at each reporting period. The Company determined the fair values of these warrants using a Black-Scholes and  lattice pricing model, as applicable.





Activity for derivative warrant liabilities during the nine months ended September 30, 2015 was as follows:





Balance at December 31, 2014

$
269,929Initial valuation of derivative liabilities upon issuance of new warrants (VC Advisors) – 250,000 warrants


19,509Decrease in fair value of derivative liability


(39,864
)Balance at September 30, 2015

$
249,574





The fair value of the aforementioned warrants was valued on September 30, 2015 using a multi-nomial lattice model as to the Boeckmann Warrants with the following weighted average assumptions: (1) risk free interest rate 1.37%, (2) term of 6.71 years, (3) expected stock volatility of 180%, (4) expected dividend rate of 0%, and (5) common stock price of $0.002.





The fair value of the VC Advisors warrants was valued on September 30, 2015 using a Black-Scholes model with the following weighted average assumptions: (1) risk free interest rate 1.01 %, (2) term of 3 years, (3) expected stock volatility of 118.04%, (4) expected dividend rate of 0%, and (5) common stock price of $0.11.





Table of Contents
 20


EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





6. DERIVATIVE LIABILITIES (continued)





Derivative conversion feature on convertible debt





Activity for derivative liabilities related to the variable conversion features on convertible debt during the nine months ended September 30, 2015 was as follows:





Lender

Balance at December 31,

2014


Initial valuation of derivative liabilities upon issuance of variable feature convertible notes


Debt

extinguishment

/conversions


Change in fair

value of derivative

liability


Balance at

September 30,

2015Bluestem Advisors

$
-


$
229,228


$
(162,125
)

$
23,712


$
90,815Carebourn Capital


-



1,285,894



(203,269
)


(317,671
)


764,954GHS Investments


-



295,488



(93,934
)


(115,550
)


86,004JMJ Financial


58,115



25,000



(55,478
)


85,867



113,504JSJ Investments


-



44,000



-



62,799



106,799KBM


66,282



45,000



(78,912
)


(32,370
)


-LG


110,867



406,707



(176,374
)


347,805



689,005RDW Capital


-



224,594



(168,673
)


114,801



170,722SBI Investments


-



758,819



(188,602
)


567,442



1,137,659VGI


-



128,716



(49,533
)


7,328



86,511Adar Bays


-



37,500



(59,520
)


22,020



-Crown Bridge Partners


-



140,000



(541,419
)


401,419



-EMA Financial


-



71,500



(327,585
)


256,085



-FireRock


-



275,271



(314,297
)


39,026



-Peak One


-



48,500



(161,984
)


113,484



-Rider Capital


-



50,000



(89,496
)


39,496



-River North


-



44,750



(182,283
)


137,533



-Tangiers


-



50,000



(123,455
)


73,455



-Union Capital


-



38,000



(198,032
)


160,032



-Total

$
235,264


$
4,198,967


$
(3,174,971
)

$
1,986,713


$
3,245,973





The fair value of these derivatives was valued on the date of the issuances of the 2015 convertible notes using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 0.09% - 0.36%, (2) term of 0.50- 3.0 years, (3) expected stock volatility of 120% - 269%, (4) expected dividend rate of 0%, and (5) common stock price of $0.002 - $0.11.





The fair value of these derivatives was valued on September 30, 2015 using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 0.31%, (2) term of 0.28 – 1.58 years, (3) expected stock volatility of 240% - 287%, (4) expected dividend rate of 0%, and (5) common stock price of $0.002.





Table of Contents
 21


EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





7. STOCKHOLDERS’ EQUITY





Authorized shares





On September 25, 2015, the Company filed a Certificate of Amendment to its Articles of Incorporation with the State of Nevada to increase the number of authorized shares of common stock from 1,000,000,000 shares to 5,000,000,000 shares.





Sales of Common Stock for Cash





During the nine months ended September 30, 2015, the Company issued 1,000,000 shares of common stock to individuals at a price of $0.05 per share for total cash proceeds of $50,000.





Aladdin





On November 25, 2014, we entered into an Equity Purchase Agreement and a Registration Rights Agreement with Aladdin Trading, LLC (“Aladdin”) in order to establish an additional source of funding. Under the Investment Agreement, Aladdin agreed to provide us with up to $5,000,000 of funding upon effectiveness of a registration statement. Following effectiveness of the registration statement, we can deliver puts to Aladdin under the Equity Purchase Agreement under which Aladdin will be obligated to purchase shares of our common stock based on the investment amount specified in each put notice, which investment amount may be any amount up to $5,000,000 less the investment amount received by us from all prior puts, if any. Puts may be delivered by us to Aladdin until the earlier of December 31, 2015 or the date on which Aladdin has purchased an aggregate of $5,000,000 of put shares. The number of shares of our common stock that Aladdin will purchase pursuant to each put notice (“Put Shares”) will be determined by dividing the investment amount specified in the put by the purchase price. The purchase price per share of common stock will be set at 50% of the Market Price for our common stock with Market Price being defined as the volume weighted average trading price for our common stock during the three consecutive trading days immediately following the date of our put notice to Aladdin (the “Pricing Period”). There is no minimum amount that we can put to Aladdin at any one time although the amount may be limited to the amount of securities that can be registered at any given time. On the put notice date, we are required to deliver put shares (“Estimated Put Shares”) to Aladdin in an amount determined by dividing the closing price on the trading day immediately preceding the put notice date multiplied by 50% and Aladdin is required to simultaneously deliver to us the investment amount indicated on the put notice. At the end of the Pricing Period, when the purchase price is established and the number of Put Shares for a particular put is determined, Aladdin must return to us any excess Put Shares provided as Estimated Put Shares or alternatively we must deliver to Aladdin any additional Put Shares required to cover the shortfall between the amount of Estimated Put Shares and the amount of Put Shares. At the end of the pricing period we must also return to Aladdin any excess related to the investment amount previously delivered to us. Pursuant to the Equity Purchase Agreement, Aladdin and its affiliates will not be issued shares of our common stock that would result in Aladdin’s beneficial ownership equaling more than 9.99% of our outstanding common stock. Pursuant to the Registration Rights Agreement, we will be registering 20,000,000 shares of our common stock for issuance to and sale by Aladdin pursuant to the Equity Purchase Agreement. Unless the price of our common stock increases substantially, we will not have access to the full commitment amount under the Equity Purchase Agreement.





On February 2, 2015, we delivered a put notice to Aladdin for $75,000. This resulted in our issuance of 1,153,847 shares to Aladdin. On February 20, 2015, we delivered a second put notice to Aladdin for $100,000. This resulted in our issuance of 1,538,462 shares to Aladdin, of which 198,877 shares were required to be returned to us for cancellation resulting in a net issuance of 1,339,585 shares to Aladdin as the 1,538,462 share issuance represented an estimate as to the number of shares covered by the put. As of March 31, 2015, Aladdin owed us $25,000 from the second put, of which $20,000 was received in May 2015. On March 10, 2015, we delivered a third put notice to Aladdin for $100,000. This resulted in our issuance of 2,352,942 shares to Aladdin. Based upon the price of our common stock for the third put valuation period we were required to issue an additional 58,322 shares to Aladdin resulting in a total issuance of 2,411,265 shares pursuant to the third put. We have deducted 58,322 shares from the share amount required to be returned to us from the second put and are now entitled to the return of 140,554 shares from the second put share issuance. Aladdin owes us $100,000 from the third put.


Table of Contents
 22


EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





7. STOCKHOLDERS’ EQUITY (continued)





Sales of Common Stock for Cash (cont’d)





Aladdin (cont’d)





During the six months ended June 30, 2015, the Company received $258,000 from Aladdin for the issuance of common stock (as described above).





On August 25, 2015, we terminated our November 25, 2014 Equity Purchase Agreement (“EP Agreement”) with Aladdin Trading, LLC (“Aladdin”).





Common Stock issued for debt conversion during the period ended September 30, 2015





Note Holder

Conversion Price

($)


Number of shares issued


Amount ($)Carebourn Capital #1


0.001615



7,250,725



11,710Carebourn Capital #2


0.000950



12,686,153



12,052Carebourn Capital #3


0.000630



16,947,062



10,677Carebourn Capital #4


0.000630



15,677,468



9,877Carebourn Capital #5


0.000615



2,349,268



1,445Carebourn Partners #1


0.000760



14,441,883



10,976Carebourn Partners #2


0.000715



15,330,835



10,962Carebourn Partners #3


0.000715



4,283,398



3,063Carebourn Partners #4*


0.000615



19,895,732



12,236Carebourn Partners #5


0.000615



19,895,739



12,236Carebourn Partners #6


0.000615



21,241,737



13,064Carebourn Partners #7*


0.000615



24,172,277



14,838Carebourn Partners #8*


0.000650



25,356,718



16,482Carebourn Partners #9*


0.000660



19,915,848



13,144Crown Bridge Partners #1


0.041600



240,384



10,000Crown Bridge Partners #2


0.031200



400,641



12500Crown Bridge Partners #3


0.026000



528,846



13750Crown Bridge Partners #4


0.008800



795,454



7,000Crown Bridge Partners #5


0.002200



3,068,181



6,750FireRock Global #1


0.009417



3,185,897



30,000FireRock Global #2


0.006933



3,605,786



25,000FireRock Global #3


0.005217



3,833,914



20,000FireRock Global #4


0.003685



4,070,556



15,000FireRock Global #5


0.002850



4,561,403



13,000FireRock Global #6


0.002550



4,430,196



11,297FireRock Global #7


0.002583



5,032,322



13,000FireRock Global #8


0.002300



7,173,913



16,500FireRock Global #9


0.002000



7,500,000



15,000FireRock Global #10


0.001883



9,292,199



17,500FireRock Global #11


0.001600



10,000,000



16,000FireRock Global #12


0.001400



10,357,142



14,500JMJ Financial #1


0.036000



200,000



7,200JMJ Financial #2


0.009630



1,000,000



9,630JMJ Financial #3


0.002340



4,500,000



10,530JMJ Financial #4


0.001920



3,700,000



7,104





Table of Contents
 23


EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





7. STOCKHOLDERS’ EQUITY (continued)




Note Holder

Conversion Price

($)


Number of shares issued


Amount

($)LG Capital #1


0.037200



419,310



15,598LG Capital #2


0.010540



1,486,470



15667.4LG Capital #3


0.002852



5,510,767



15,717LG Capital #4


0.001178



9,814,728



11,562LG Capital #5


0.000868



13,369,988



11,605LG Capital #6


0.000806



14,419,392



11,622LG Capital #7


0.000806



13,133,014



10,585LG Capital #8


0.000806



14,467,245



11,661LG Capital #9


0.000806



14,494,168



11,682RDW Capital (Redwood) #1


0.007500



3,545,000



26,588RDW Capital (Redwood) #2


0.002520



4,000,000



10,080RDW Capital (Redwood) #3


0.002280



5,300,000



12,084RDW Capital (Redwood) #4


0.002280



5,600,000



12,768RDW Capital (Redwood) #5


0.001980



5,960,000



11,801RDW Capital (Redwood) #6


0.001380



9,500,000



13,110RDW Capital (Redwood) #7


0.001200



10,000,000



12,000RDW Capital (Redwood) #8


0.001100



1,427,000



1,570Rider Capital #1


0.021001



1,111,111



23,334Rider Capital #2


0.017500



1,523,771



26,666SBI (Sea Otter) #1


0.009950



3,381,271



33,644SBI (Sea Otter) #2


0.001700



7,383,902



12,553SBI (Sea Otter) #3


0.001000



11,903,343



11,903SBI (Sea Otter) #4


0.001000



6,294,583



6,295SBI (Sea Otter) #5


0.001000



21,103,453



21,103Tangiers Investment Group #1


0.001976



11,133,603



22,000Tangiers Investment Group #2


0.001716



11,655,012



20,000Tangiers Investment Group #3


0.001612



9,821,884



15,833Union Capital #1


0.000806



3,132,122



2,524Bluestem #1


0.000660



15,151,515



10,000Bluestem #2


0.000660



33,681,818



22,230GHS Investments #1


0.000780



25,844,000



20,158




Table of Contents
 24


EVENTURE INTERACTIVE, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 
 7. STOCKHOLDERS’ EQUITY (continued)








Common Stock issued for Services





Gannon Giguiere





On February 2, 2015, we entered into Amendment No. 2 to the November 21, 2012 Employment Services Agreement, as amended on March 10, 2014, between us and Gannon Giguiere, our Director and former CEO. The amendment reduced the CEO’s base annual salary from $180,000 to $1, clarified the provision under which we can issue bonuses to the CEO, and provided for the issuance of 5,000,000 shares of our common stock (which were granted piggyback registration rights) and 2,000,000 stock options which have a ten-year term and are exercisable for the purchase of 2,000,000 shares of our common stock at a price of $0.10 per share. The stock options vest monthly and ratably over the 36-month period commencing upon issuance. The fair value of the 5,000,000 shares of common stock issued was $0.12 per share ($599,500). During the nine months ended September 30, 2015, the Company recorded stock-based compensation of $599,500 in connection with the issuance of these shares.





On February 2, 2015, $351,000 in accrued salary due to Gannon Giguiere, was converted into shares of our restricted common stock at a conversion price of $0.07 per share resulting in the issuance of 5,014,286 shares of common stock which were granted piggyback registration rights. The fair value of the common stock issued was $0.12 per share ($601,213). The Company recorded the difference between the accrued salary and the fair value of the shares issued of $250,213 as stock-based compensation during the nine months ended September 30, 2015.





On February 2, 2015, an aggregate of $160,550 of related party notes payable and $431 of interest was converted into shares of our restricted common stock at a conversion price of $0.07 per share resulting in the issuance of 2,299,729 shares of common stock to Mr. Giguiere. Piggyback registration rights apply to these shares. The fair value of the common stock issued was $0.12 per share ($275,738). The Company recorded the difference between the related notes payable and accrued interest and the fair value of the shares issued of $114,757 as stock-based compensation during the nine months ended September 30, 2015.





Alan Johnson





On February 2, 2015, we entered into Amendment No. 2 to the November 21, 2012 Employment Services Agreement, as amended on March 10, 2014, between us and Alan Johnson, our Chief Corporate Development Officer. The amendment reduced Mr. Johnson’s base annual salary from $180,000 to $1, clarified the provision under which we can issue bonuses to Mr. Johnson, and provided for the issuance of 2,000,000 shares of our common stock (which were granted piggyback registration rights) and 1,000,000 stock options to Mr. Johnson upon execution of the amendment. The stock options were issued under our 2015 Equity Incentive Plan as non-statutory stock options. The stock options have a ten-year term and are exercisable for the purchase of 1,000,000 shares of our common stock at a price of $0.10 per share. The stock options vest monthly and ratably over the 36-month period commencing upon issuance. The fair value of the 2,000,000 shares of common stock issued was $0.12 per share ($239,800). During the nine months ended September 30, 2015, the Company recorded stock-based compensation of $239,800 in connection with the issuance of these shares.


On February 2, 2015, $339,750 in accrued salary due to Alan Johnson was converted into shares of our restricted common stock at a conversion price of $0.07 per share resulting in the issuance of 4,853,571 shares of common stock to Mr. Johnson. Piggyback registration rights apply to these shares. The fair value of the common stock issued was $0.12 per share ($581,943). The Company recorded the difference between the accrued salary and the fair value of the shares issued of $242,193 as stock-based compensation during the nine months ended September 30, 2015.





On February 2, 2015, an aggregate of $159,842 of related party notes payable and $1,139 of interest was converted into shares of our restricted common stock at a conversion price of $0.07 per share resulting in the issuance of 2,299,729 shares of common stock to Mr. Johnson. Piggyback registration rights apply to these shares. The fair value of the common stock issued was $0.12 per share ($275,738). The Company recorded the difference between the related notes payable and accrued interest and the fair value of the shares issued of $114,757 as stock-based compensation during the nine months ended September 30, 2015.


Table of Contents
 25


EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





7. STOCKHOLDERS’ EQUITY (continued)





Common Stock issued for Services (Cont'd)




Mike Rountree





On February 2, 2015, we entered into Amendment No. 1 to the March 10, 2014 Employment Services agreement between us and Michael Rountree, our Chief Financial Officer and Treasurer. The Amendment reduced Mr. Rountree’s base annual salary from $180,000 to $1, clarified the provision under which we can issue bonuses to Mr. Rountree and provided for the issuance of 2,000,000 shares of our common stock (which were granted piggyback registration rights) and 1,000,000 stock options to Mr. Rountree upon execution of the amendment. The stock options were issued under our 2015 Equity Incentive Plan as non-statutory stock options. The stock options have a ten-year term and are exercisable for the purchase of 1,000,000 shares of our common stock at a price of $0.10 per share. The stock options vest monthly and ratably over the 36 month period commencing upon issuance. The fair value of the 2,000,000 shares of common stock issued was $0.12 per share ($239,800). During the nine months ended September 30, 2015, the Company recorded stock-based compensation of $239,800 in connection with the issuance of these shares.





On February 2, 2015, $227,435 in accrued salary due to Michael Rountree, our Treasurer and Chief Financial Officer, was converted into shares of our restricted common stock at a conversion price of $0.07 per share resulting in the issuance of 3,249,071 shares of common stock to Mr. Rountree. Piggyback registration rights apply to these shares. The fair value of the common stock issued was $0.12 per share ($389,564). The Company recorded the difference between the accrued salary and the fair value of the shares issued of $162,129 as stock-based compensation during the nine months ended September 30, 2015.





On February 2, 2015, an aggregate of $40,000 of related party notes payable and $143 of interest was converted into shares of our restricted common stock at a conversion price of $0.07 per share resulting in the issuance of 573,471 shares of common stock to Mr. Rountree. Piggyback registration rights apply to these shares. The fair value of the common stock issued was $0.12 per share ($68,759). The Company recorded the difference between the related notes payable and accrued interest and the fair value of the shares issued of $28,616 as stock-based compensation during the nine months ended September 30, 2015.





Other issuances of common stock for services





The Company issued 3,400,000 shares of common stock in aggregate for consulting services during the nine months ended September 30, 2015 and recorded stock-based compensation of $399,300 based on the grant date fair value of the common shares issued.





The Company issued 8,000,000 shares for services provided to the Company from two entities and recorded consulting fees of $128,000 based on the grant date fair value of the common shares issued.




Table of Contents
 26


EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





7. STOCKHOLDERS’ EQUITY (continued)





Other issuances of common stock for services (cont’d)





Series A Preferred Stock issued for services





On June 3, 2015, the Company issued 1,000,000 shares of the Company’s Series A preferred stock to a Director of the Company for services. Each share of Series A preferred stock shall have 1,000 votes on the election of their directors and for all other purposes. The Series A preferred stock is not convertible to common stock and has no dividend rights or liquidation preference. The Company obtained a third party valuation of the preferred stock and recorded stock-based compensation of $920,800 during the nine months ended September 30, 2015.





On September 26, 2015, the Company issued 4,000,000 shares of the Company’s Series A Preferred Stock to the President of the Company for services. Each share of Series A preferred stock shall have 1,000 votes on the election of their directors and for all other purposes. The Series A preferred stock is not convertible to common stock and has no dividend rights or liquidation preference. The Company obtained a third party valuation of the preferred stock and recorded stock-based compensation of $317,100 during the nine months ended September 30, 2015.





2015 Equity Incentive Plan





On February 2, 2015, our board of directors approved our 2015 Equity Incentive Plan. Our shareholders have yet to approve the 2015 Equity Incentive Plan and unless they do so prior to February 2, 2016, we will not be able to issue incentive stock options under the 2015 Equity Incentive Plan. A total of 11,000,000 shares of our common stock are reserved for issuance under the 2015 Plan. If an incentive award granted under the 2015 Plan expires, terminates, is unexercised or is forfeited, or if any shares are surrendered to us in connection with an incentive award, the shares subject to such award and the surrendered shares will become available for further awards under the 2015 Plan. Shares issued under the 2015 Plan through the settlement, assumption or substitution of outstanding awards or obligations to grant future awards as a condition of acquiring another entity are not expected to reduce the maximum number of shares available under the 2015 Plan. In addition, the number of shares of common stock subject to the 2015 Plan and the number of shares and terms of any incentive award are subject to adjustment in the event of any stock dividend, spin-off, split-up, stock split, reverse stock split, recapitalization, reclassification, merger, consolidation, liquidation, business combination or exchange of shares or similar transaction.





The compensation committee of the Board, or the Board in the absence of such a committee, will administer the 2015 Plan and grants made thereunder. Subject to the terms of the 2015 Plan, the compensation committee has complete authority and discretion to determine the terms of awards under the 2015 Plan. Any officer or other employee of the Company or its affiliates, or an individual that the Company or an affiliate has engaged to become an officer or employee, or a consultant or advisor who provides services to the Company or its affiliates, including a non-employee director of the Board, is eligible to receive awards under the 2015 Plan.





Our Board of Directors or if then in place, the compensation committee of our Board of Directors, may amend, suspend or terminate the 2015 Plan without stockholder approval or ratification at any time or from time to time. No change may be made that increases the total number of shares of our common stock reserved for issuance under the 2015 Plan or reduces the minimum exercise price for options or exchange of options for other incentive awards. Unless sooner terminated, the 2015 Plan terminates ten years after the date on which it was adopted.


Table of Contents
 27


EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





7. STOCKHOLDERS’ EQUITY (continued)





Stock Option Awards





On February 2, 2015, ten-year non-statutory stock options to purchase an aggregate of 6,950,000 shares of our common stock, vesting monthly and ratably over the 36 month period commencing upon issuance on the first day of each month during the vesting period with an initial vesting date of March 1, 2015 and a final vesting date of February 1, 2018 and an exercise price of $0.10 per share were issued under the 2015 Equity Incentive Plan to our employees. The options have a 10-year term. The stock price on the grant date was $0.03 per share. As a result, the intrinsic value for these options on the grant date was $0. The fair value of these options was $816,037 and was valued on the date of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 1.68%, (2) term of 10 years, (3) expected stock volatility of 176%, and (4) expected dividend rate of 0%.





A summary of stock option activity is presented below:





Number of

Shares


Weighted-average

Exercise Price


Weighted-average Remaining Contractual Term (years)


Aggregate

Intrinsic

ValueOutstanding at December 31, 2014


2,583,744


$
0.81





$
-Granted


6,950,000


$
0.10Forfeited/Cancelled/Expired


(551,947
)

$
0.41Outstanding at September 30, 2015


8,981,797


$
0.28



8.98


$
-Exercisable at September 30, 2015


3,159,218


$
0.44



8.55


$
-





During the nine months ended September 30, 2015 and 2014, the Company recognized stock-based compensation expense of $1,177,752 and $2,626,715, respectively, related to stock options. As of September 30, 2015, there was $863,633 of total unrecognized compensation cost related to non-vested stock options.





Warrant Awards





On May 19, 2015, the Company issued warrants to a third party to purchase 250,000 shares of its common stock granted with an exercise price of $0.1083 per share. The stock price on the grant date was $0.11 per share. As a result, the intrinsic value for these warrants on the grant date was $0. The fair value of these warrants was approximately $23,284 and was valued on the date of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 1.01%, (2) term of 3 years, (3) expected stock volatility of 163.47%, and (4) expected dividend rate of 0%. All of the warrants vested immediately.





In March 2015, the Company issued 500,000 shares of common stock and 500,000 warrants to an investor for cash proceeds of $25,000. The warrants have a 10-year term and have an exercise price of $0.10 per share. The stock price on the grant date was $0.06 per share. As a result, the intrinsic value for these warrants on the grant date was $0. The fair value of these warrants was $29,000 and was valued on the date of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 1.98%, (2) term of 10 years, (3) expected stock volatility of 147%, and (4) expected dividend rate of 0%. All of the warrants vested immediately.





Table of Contents
 28


EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





7. STOCKHOLDERS’ EQUITY (continued)





Warrant Awards (cont’d)





In February 2015, the 7 members of our Advisory Board were each issued a ten-year warrant to purchase 100,000 shares of our common stock at an exercise price of $0.10 per share resulting in the issuance of an aggregate of 700,000 warrants. The stock price on the grant date was $0.12 per share. As a result, the aggregate intrinsic value for these warrants on the grant date was $1,400. The fair value of these warrants was $82,650 and was valued on the date of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 1.68%, (2) term of 10 years, (3) expected stock volatility of 148%, and (4) expected dividend rate of 0%. All of the warrants vested immediately.





In February 2015, 11 advisors/consultants were each issued a ten-year warrant to purchase 100,000 shares of our common stock at an exercise price of $0.10 per share resulting in the issuance of an aggregate of 1,100,000 warrants. The stock price on the grant date was $0.12 per share. As a result, the aggregate intrinsic value for these warrants on the grant date was $2,200. The fair value of these warrants was $129,880 and was valued on the date of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 1.68%, (2) term of 10 years, (3) expected stock volatility of 148%, and (4) expected dividend rate of 0%. All of the warrants vested immediately.





In January 2015, a lender (FireRock) was issued 500,000 warrants in connection with the issuance of a convertible note agreement. The warrants have a 5-year term and have an exercise price of $0.10 per share. The stock price on the grant date was $0.10 per share. As a result, the intrinsic value for these warrants on the grant date was $0. The fair value of these warrants was $38,774 and was valued on the date of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 1.29%, (2) term of 5 years, (3) expected stock volatility of 107%, and (4) expected dividend rate of 0%. All of the warrants vested immediately.





On September 1, 2015,  the Company issued 1,000,000 warrants to Mike Hogue. The warrants have a 10-year term and have an exercise price of $0.001 per share.  The stock price on the grant date was $0.002 per share.




As a result, the intrinsic value for these warrants on the grant date was $1,000. The fair value of these warrants was $1,960 and was valued on the date of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 2.17%, (2) term of 5 years, (3) expected stock volatility of 135.63%, and (4) expected dividend rate of 0%. All of the warrants vested immediately.


A summary of warrant activity is presented below:





Number of

Shares


Weighted-average

Exercise Price


Remaining Contractual Term (years)


Aggregate

Intrinsic

ValueOutstanding at December 31, 2014


3,760,831


$
0.75


-


-Granted


4,050,000


$
0.10


-


-Warrants issued pursuant to anti-dilution adjustments


53,448,344


$
0.48


-


-Exercised


-


$
-


-


-Expired/Forfeited


(250,000
)

$
1.00


-


-Outstanding and exercisable at September 30, 2015


61,009,175


$
0.45



7.30


$
26,500








Table of Contents
 29











EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





8. COMMITMENTS





Consulting Agreements





During August 2014, the Company entered into a 2-year consulting services agreement with an individual. Pursuant to the agreement, the individual will be paid $50,000 per year. In connection with the consulting services agreement, the individual assigned to the Company all of the assets owned by the individual related to the individual’s business operations being conducted through the name Gift Ya Now including, but not limited to, software code base, original design / creative elements, domain name and all strategic business relationships. The assets assigned to the Company had a fair value of $0.





On October 28, 2014, the Company entered into a consulting agreement with OTC Media, LLC (“OTC Media”) pursuant to which OTC Media provides us with investor and public relations services. The services may include public relations and direct mail campaigns. In connection therewith, we pay OTC Media a service fee equal to 20% of the cost of the campaigns together with reimbursement for the cost of the campaigns. The consulting agreement is in effect until December 31, 2015 and is subject to renewal.





On May 19, 2015, the Company entered into a twelve (12) month consulting agreement with VC Advisors (“VC”) pursuant to which VC provides us with financial consulting services on a non-exclusive basis. The services may be related to corporate finance matters, joint ventures and financial strategies. In connection therewith, we pay VC a service fee equal to $15,000 per month, payable in cash or common stock.





Associates, PLC (“SD Mitchell”) pursuant to which SD Mitchell advise us with certain legal, corporate and business operations and more specifically regarding to public filings and compliance with regard to the Company. In connection therewith, we pay SD Mitchell a service fee equal to $1,500 per month for the review of Form 10-K, Form 10-Q, Form 8-K’s and review of contractual agreements and we pay consultant in the amount of $200 per hour for assistance in preparation of contracts, correspondence, engaging in negotiations, as well as emails and telephone calls.





Employment Agreements





The Company signed an employment agreement with its Chief Financial Officer. Pursuant to the agreement, in the event the Chief Financial Officer is terminated without cause, the CFO will be entitled to receive all compensation, including any bonus payments, accrued through the date of termination together with all compensation, including bonus payments, earned through the severance period which is defined as a period of 18 months from termination if more than 18 months remain on the term of the employment agreement at the time of termination or as a period of 12 months from termination, if less than 18 months remain on the term of the employment agreement at the time of termination.





9. FAIR VALUE MEASUREMENTS





The following table sets forth, by level within the fair value hierarchy, the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2015:





Quoted PricesIn Active


Significant





TotalMarkets for


Other


Significant


CarryingIdentical


Observable


Unobservable


Value as ofAssets


Inputs


Inputs


September 30,Description

(Level 1)


(Level 2)


(Level 3)


2015Warrant derivatives

$
-


$
-


$
249,574


$
249,574Variable conversion features – convertible debt derivatives

$
-


$
-


$
3,245,974


$
3,245,974$
-


$
-


$
3,495,548


$
3,495,548





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 30











EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





9. FAIR VALUE MEASUREMENTS(continued)





The following table sets forth, by level within the fair value hierarchy, the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2014:





Quoted PricesIn Active


Significant





TotalMarkets for


Other


Significant


CarryingIdentical


Observable


Unobservable


Value as ofAssets


Inputs


Inputs


September 30,Description

(Level 1)


(Level 2)


(Level 3)


2014Derivative liabilities - warrant instruments

$
-


$
-


$
2,651,155


$
2,651,155





The following table sets forth a reconciliation of changes in the fair value of financial liabilities classified as level 3 in the fair value hierarchy:








Significant Unobservable

Inputs (Level 3)Nine Months Ended

September 30,2015


2014Beginning balance

$
505,193


$
-Additions


4,198,967



449,624Debt conversion/extinguishment


(3,174,971
)


-Change in fair value


1,966,358



2,201,531Ending balance

$
3,495,547


$
2,651,155Change in unrealized gain included in earnings

$
1,966,358


$
2,201,531





Table of Contents
 31





EVENTURE INTERACTIVE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)








10. SUBSEQUENT EVENTS





Debt issuances
 532,370,521 shares in respect of conversion notices received for a total of $279,513 in principal and interest related to various Convertbile Notes as discusssed in Note 5 above.





Change in Registered Public Accounting Firm





OnOctober 16, 2015 the Company  notified its independent registered public accounting firm, GBH CPAs, PC (“GBH”), that the Company had decided to change auditors and was therefore dismissing GBH, effective immediately.  The Company’s decision was approved by the Company’s board of directors, acting as the audit committee, on that same day, and concurrent with GBH’s dismissal, the board of directors appointed BF Borgers CPA PC (“Borgers”) as the Company’s new independent registered public accounting firm.











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 32







ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS





Statement Regarding Forward-Looking Information





This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in this Quarterly Report on Form 10-Q, including without limitation, statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations regarding our financial position, estimated working capital, business strategy, the plans and objectives of our management for future operations and those statements preceded by, followed by or that otherwise include the words “believe”, “expects”, “anticipates”, “intends”, “estimates”, “projects”, “target”, “goal”, “plans”, “objective”, “should”, or similar expressions or variations on such expressions are forward-looking statements. We can give no assurances that the assumptions upon which the forward-looking statements are based will prove to be correct. Because forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements, including, but not limited to, the availability and pricing of additional capital to finance operations.





Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this Quarterly Report on Form 10-Q to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.





The following discussion should be read in conjunction with our unaudited consolidated financial statements and the accompanying notes included elsewhere in this Quarterly Report on Form 10-Q.





Overview





Since November 21, 2012, we have been engaged in the social communications business with a specific focus on socializing the invitation, calendar, photo/video sharing and local event memory experiences. We have yet to achieve revenues and do not expect to achieve revenues until in or about the second quarter of 2016.





During thenine months ended September 30, 2015, we have continued to develop and commercialize our business, including that part of our business dedicated to software applications and hardware devices, and intend to continue to do so during the remainder of 2015. This will require us to raise additional funds. No assurance can be given that we will be able to do so or that we will be able to do so on reasonable terms. We have incurred losses since our inception. The future of our Company is dependent upon our ability to obtain additional financing, successfully develop and market our products and services and achieve revenues and profitability. We represent a speculative investment. Investors may lose some or all of their investment in us.





Our goal is to bring to market innovative hardware and software products and services centered around social communications and the process sharing of memorable information captured at organized events. Our business plan includes the development and marketing of social calendaring applications, participation games, wearable cameras and streaming devices. As part of our strategy we aim to leverage our ability to design and develop proprietary devices, software and services to provide our customers solutions with superior design, ease-of-use and seamless integration. Our full product solution coined “Eventure Everywhere” is being developed to capture everyday events and turn them into meaningful memories to be scrapbooked, organized, and referenced forever.





Our technically unique, yet simple-to-use, patented mobile-to-web technology platform provides users with a single application that addresses the inefficiencies in the social marketplace by enabling captured memories to be centrally stored and effortlessly shared among event attendees in a secure, real-time, mobile ad-hoc network. Eventure EverywhereTM is keystone to our business offerings and our strategy to maximize the experience of each event with rich features to successfully schedule, capture, scrapbook (store), and share one’s life and events in a meaningful way.





Our services can be accessed through:





·
Mobile applications for Android-based smartphones and devices;





·
Mobile applications for iOS-based smartphones and devices;





·
Website – www.eventure.com*; and





·
Wearable cameras and devices networked through our smart streaming hub, which, together with the above, collectively form the Eventure EverywhereTM Service



The contents of our Website are not incorporated into this Report.





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 33


Feature highlights of Eventure EverywhereTM include:





·
An instant, smart communications platform that allows users to tap into our rich features through text messaging;





·
A native calendar to mark the event date, time, and location. Providing enhanced RSVP management, organizational list generation, and intuitive reminders to attendees;





·
Invitation and cards libraries of thousands of pieces allowing for the creation of invitations to/from events, and transmission of those invitations via email, SMS, or direct mail, and the browsing of future events that friends are attending (and opt-in) to get invited to join via private groupings;





·
Secure and private group-forming whereby a user has ultimate control of what photos, videos and messages may be shared with whom and when;





·
Targeted recommendations of local ideas to users based on behaviors, habits, and interests. With a local events database comprised of over 7 million event and activities listings; over 21 million venue listings; over 10 million interests; and over 30 million information pieces;





·
Passive auto-check-in capability across any mobile platform built on a technique called geo-fencing, which allows participants of events to form a private peer-to-peer network for the purpose of capturing pictures, videos, and messaging (which is the core of our Patent – US Patent No. 8,769,610) – all of which is streamed to a scrapboard and tied to each specific event for long-term memory sharing, retrieval, and storage;





·
Wearable cameras and content streaming hub platform that allow users to tap into their collage of digital memories; and





·
A series of event inspired games titles, including the following:





Lil BuddyTM, “Don’t show up without your Lil’ Buddy.”





Summary: A smart phone’s best friend, Lil BuddyTM, will escort you to all your events, digital or otherwise. Show off your digital buddies at virtual buddy events, accessories, training parties, and other buddy-celebrating activities.





TablibTM, “What gossip do you know about your friends?”





Summary: Make tabloids dedicated to your friends. TablibTM is a strange mix of tabloid magazines and mad lib’s. We let you pick from an array of strange and juicy stories and you put in existing or new pictures of your friends or yourself. A fully customizable array of options for you to embarrass, praise, and do what is necessary to your friends. After making these stories we put them on “the board” and whichever story has the most views goes into a published e-magazine every month.





Connection RouletteTM “Interact and meet.”





Summary: Take an educated gamble on whom you will meet at your event. People will be thrown onto the spinning “roulette” wheel and randomly stop on a connections or potential connection from the same event. Interact with old friends, new friends, or get your network on by tuning to different social modes inside the game. You feel like only meeting new business relationships? Then turn on only business networking mode. Just want to meet a new friend? Turn on “friend zone”. Enrich your social life at any party with a simple spin of the wheel.





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 34


You’re it! TM, “Tag, you’re it!”





Summary: You’re It adopts the classic game of Tag to the smart phone. Play with your friends, a new friend, or anyone who is down for a good ol’ fashioned game of tag. You’re It has the same rules as Tag: One user is “it” and the other users are “not-its”. To tag someone simply be within 5 feet of the user that’s “it”. When you have been tagged a message on your phone alerts you to start looking for “not-its”. A timer for being “it” is set, and you lose if you don’t find someone to tag before the time runs out.





Baby Sit-N-LearnTM “Teaching children to learn through images and imagination.”





Summary: The idea is simple, children learn best through interactive and entertaining imagery. While you are at an event children get restless fast so why not offer them a chance to present happy, positive imagery. Make every environment a place for your child to learn at a high level that involves interest, critical thinking, and creativity.





Butterfly NarrativeTM, “Be the change in your story.”





Summary: Explore a new story every time you play, or continue the story you’ve already started. Each level is a new decision that influences new twists and turns in your story. Through simple actions and tasks, you can build your story. Choose wisely, as each new stage could have irreversible effects on your narrative. Welcome to an illustrated experience that tells an ever-changing story.





Face JumbleTM, “Solve the jumble and learn the secret!”





Summary: Solve the jumble and reveal your friends darkest secrets. Face JumbleTM connects to your friends, obtains gossip from each of them, and then allows you to uncover their “secrets” by solving a picture jumble. After solving each picture jumble from your friends, you will win an opportunity to find out the latest gossip.





Pong RicochetTM, “Aim, bounce, conquer the cup.”





Summary: Pong RicochetTM is based on one principle: get the Pong into the cup. Players are given 3 chances to get the Pong into the cup before they can move onto the next level. With every level completed the number of bounces needed to beat the level goes up as well. The player is challenged to bounce the Pong with all kinds of obstacles, targets, and environments inside the game. Increase your level and upgrade your Pong accordingly to complete further levels and to unlock awards and secrets inside the game.





On August 12, 2014, we acquired the business operations, including the assets, of Gift Ya Now, an electronic gift card platform created by Vinay Jatwani, who joined us in a consulting capacity in conjunction therewith. Gift Ya Now has more than 450 retailers and restaurants on its platform which enables consumers to quickly and easily find, purchase and send electronic gift cards from leading brands. The assets of Gift Ya Now are comprised of software code base, original design / creative elements, domain name and strategic relationships. We intend to integrate Gift Ya Now into the Eventure Service as well as maintaining Gift Ya Now as a standalone brand. Mr. Jatwani will be working with us with respect to such integration and the launch of Gift Ya Now as part of our product offerings. We continue to work through partnership relationships and core integration into our Website, Android and iOS applications.





In the course of the evolution of our products and services, we anticipate receiving revenues from the following sources:





Hardware SalesDigital Invitation SalesEvent Ticket SalesGift Card SalesIn-app PurchasingSponsored ContentTargeted ListingsPromotional OffersMedia Cloud StorageAd Suppression SubscriptionsData licensing





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 35


Results of Operations





Revenues





We generated negative revenues of ($1,098) (2014 – nil) and ($750) (2014- nil) during the three and nine month periods ended September 30, 2015.  Costs of goods sold were more than gross revenues in each of the comparative periods.





Loss from Operations





Three months ended September 30, 2015 and 2014





We incurred net losses of $6,062,850 and $651,574, respectively, for the three months ended September 30, 2015 and 2014.   The increase in net losses period over period was substantively due to a change in the fair value of derivative liabilities period over period whereby the Company reported a gain in the three months ended September 30, 2014 of $1,186,483 as compared to a loss in the current three month period of $4,739,108.  Operating losses decreased slightly period over period from $1,838,057 (2014) to $1,323,742 in the current three months ended September 30, 2015.





Nine Months ended September 30, 2015 and 2014





We incurred net losses of $13,066,551 and $22,807,824, respectively, for the nine months ended September 30, 2015 and 2014.   The decrease in net losses was substantively due to a change in the fair value of derivative liabilities period over period whereby the Company reported a gain in the nine months ended September 30, 2014 of $2,021,531 as compared to a loss in the current nine month period of $5,539,816.  Operating losses decreased period over period from $20,606,293 (2014) to $7,526,735 in the current three months ended September 30, 2015, substantially as a result of a reduction to stock based compensation from $18,922,507 (2014) to $5,124,731.





Liquidity and Capital Resources





We will need additional capital to implement our strategies. There is no assurance that we will be able to raise the amount of capital that we seek for acquisitions or for future growth plans. Even if financing is available, it may not be on terms that are acceptable to us. In addition, we do not have any determined sources for any future funding. If we are unable to raise the necessary capital at the times we require such funding, we may have to materially change our business plan, including delaying implementation of aspects of our business plan or curtailing or abandoning our business plan. We represent a speculative investment and investors may lose all of their investment.





Since inception, we have been financed primarily by way of sales of our convertible debt, common stock and loans from officers, directors and third parties.





As of September 30, 2015, the Company had a cash balance and asset total of $22,447 and $82,028 respectively, compared with $2,957 and $70,935 of cash and total assets, respectively, as of December 31, 2014. Of total assets of $82,028 and $70,935 respectively, we had fixed assets, net, of $44,385 and $52,782 at September 30, 2015 and December 31, 2014.





As of September 30, 2015, the Company had current liabilities of $4,702,885 and total liabilities of $4,952,459 compared with current liabilities of $2,210,205 and total liabilities of $2,538,249 as of December 31, 2014. Current liabilities consisted of accounts payable, accrued expenses, related party notes payable, notes payable convertible notes payable and derivative liabilities.





The overall working deficit increased from $2,192,052 deficit at December 31, 2014, to $4,665,242 at September 30, 2015. We attribute the increase to having no revenues to sustain our operating costs as we are an early-stage company, as well as to the large increase in the derivative liabilities associated with convertible notes issued in the period.





Net Cash Used in Operating Activities





Net cash used in operating activities was $1,857,015 for the nine months ended September 30, 2015, as compared to net cash used of $1,255,630 for the nine months ended September 30, 2014. The change in net cash used in operations was primarily due to the Company incurring a larger net loss (excluding non-cash expenses).





Net Cash Used by Investing Activities





During the nine months ended September 30, 2015 and 2014, we used $13,725 and $504,635, respectively, of cash in investing activities. The cash used in investing activities in the nine months ended September30, 2015 was for the purchase of fixed assets. The cash used in investing activities in the nine months ended September 30, 2014 was for software development costs of $468,450 and to purchase fixed assets of $36,185.





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 36


Net Cash Provided by Financing Activities





During the nine months ended September 30, 2015 and 2014, we received $1,890,230 and $1,700,000, respectively, in cash from financing activities. During the nine months ended September 30, 2015, the cash received was largely from the issuance of debt by way of convertible notes, and the sale of common stock.  We also received related party advances to fund operations in the period of $161,380. During the nine months ended September 30, 2014, the cash received was predominantly from the sale of common stock, as well as proceeds from related party loans.





General





We will only commit to capital expenditures for any future projects requiring us to raise additional capital as and when adequate capital or new lines of finance are made available to us. There is no assurance that we will be able to obtain any financing or enter into any form of credit arrangement. Although we may be offered such financing, the terms may not be acceptable to us. If we are not able to secure financing or it is offered on unacceptable terms, then our business plan may have to be modified or curtailed or certain aspects terminated. There is no assurance that even with financing we will be able to achieve our goals.





Going Concern





Our financial statements have been prepared on a going concern basis which assumes that we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. We have incurred losses since inception resulting in an accumulated deficit of $40,801,476 as of September 30, 2015 and further losses are anticipated in the development of our business raising substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our generating profitable operations in the future and/or obtaining the necessary financing to meet our obligations and repay our liabilities arising from normal business operations and loans when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand, loans from officers, directors and third parties and/or sales of common stock. Our financial statements do not include any adjustments relating to the recoverability and reclassification of recorded asset amounts, or amounts and classifications of liabilities that might result from this uncertainty.





Critical Accounting Policies and Estimates





Use of Estimates and Assumptions





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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes 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 the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.





Software Development Costs





Costs incurred in the research and development of new software products are expensed as incurred until technological feasibility has been established. After technological feasibility is established, any additional costs are capitalized in accordance with authoritative guidance until the product is available for general release.





Stock-based Compensation





We measure stock-based compensation cost at the grant date based on the fair value of the award and recognize it as expense, over the vesting or service period, as applicable, of the stock award using the straight-line method.





Table of Contents
 37


Off-Balance Sheet Arrangements





None.





Contractual Obligations





Not applicable.





ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





Not applicable.





ITEM 4. CONTROLS AND PROCEDURES





Evaluation of Disclosure Controls and Procedures





We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports filed under the Securities Exchange Act of 1934, as amended, or 1934 Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to ensure that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer as appropriate, to allow timely decisions regarding required disclosure. At the end of the nine months ended September 30, 2015 we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and the principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) under the 1934 Act. Based on this evaluation, and for the same reasons set forth in our Annual Report on Form 10-K for the year ended December 31, 2014, management concluded that as of September 30, 2015 our disclosure controls and procedures were not effective.





Limitations on Effectiveness of Controls and Procedures





Our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), does not expect that our disclosure controls and procedures will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.





Changes in Internal Controls





During the nine months ended September 30, 2015, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.





Table of Contents
 38


PART II – OTHER INFORMATION





ITEM 1. LEGAL PROCEEDINGS





From time to time, we may be a defendant and plaintiff in various legal proceedings arising in the normal course of our business. We are currently not a party to any material legal proceedings or government actions, including any bankruptcy, receivership, or similar proceedings. In addition, we are not aware of any known litigation or liabilities involving the operators of our properties that could affect our operations. Furthermore, as of the date of this Quarterly Report, our management is not aware of any proceedings to which any of our directors, officers, or affiliates, or any associate of any such director, officer, affiliate, or security holder is a party adverse to our company or has a material interest adverse to us.





ITEM 1A. RISK FACTORS





Not applicable.





ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





Shares issued during the three months ended September 30, 2015 as a result of notices of conversion under certain Convertible Notes Payable (ref: Note 5 to the financial statements contained herein):





Note Holder

Conversion Price/FMV ($)

Number of shares

issued

Amount ($)

DateCarebourn Capital #1

0.001615

7,250,725

11,710

29/07/2015Carebourn Capital #2

0.000950

12,686,153

12,052

06/08/2015Carebourn Capital #3

0.000630

16,947,062

10,677

27/08/2015Carebourn Capital #4

0.000630

15,677,468

9,877

31/08/2015Carebourn Capital #5

0.000615

2,349,268

1,445

09/09/2015Carebourn Partners #1

0.000760

14,441,883

10,976

13/08/2015Carebourn Partners #2

0.000715

15,330,835

10,962

18/08/2015Carebourn Partners #3

0.000715

4,283,398

3,063

24/08/2015Carebourn Partners #4*

0.000615

19,895,732

12,236

10/09/2015Carebourn Partners #5

0.000615

19,895,739

12,236

14/09/2015Carebourn Partners #6

0.000615

21,241,737

13,064

17/09/2015Carebourn Partners #7*

0.000615

24,172,277

14,838

22/09/2015Carebourn Partners #8*

0.000650

25,356,718

16,482

24/09/2015Carebourn Partners #9*

0.000660

19,915,848

13,144

29/09/2015Crown Bridge Partners #1

0.041600

240,384

10,000

28/05/2015Crown Bridge Partners #2

0.031200

400,641

12500

10/06/2015Crown Bridge Partners #3

0.026000

528,846

13750

18/06/2015Crown Bridge Partners #4

0.008800

795,454

7,000

30/06/2015Crown Bridge Partners #5

0.002200

3,068,181

6,750

16/07/2015FireRock Global #1

0.009417

3,185,897

30,000

13/07/2015FireRock Global #2

0.006933

3,605,786

25,000

15/07/2015FireRock Global #3

0.005217

3,833,914

20,000

16/07/2015FireRock Global #4

0.003685

4,070,556

15,000

17/07/2015FireRock Global #5

0.002850

4,561,403

13,000

20/07/2015FireRock Global #6

0.002550

4,430,196

11,297

21/07/2015FireRock Global #7

0.002583

5,032,322

13,000

22/07/2015FireRock Global #8

0.002300

7,173,913

16,500

28/07/2015FireRock Global #9

0.002000

7,500,000

15,000

30/07/2015FireRock Global #10

0.001883

9,292,199

17,500

31/07/2015FireRock Global #11

0.001600

10,000,000

16,000

03/08/2015FireRock Global #12

0.001400

10,357,142

14,500

04/08/2015  Table of Contents
 39
 JMJ Financial #2

0.009630

1,000,000

9,630

09/07/2015JMJ Financial #3

0.002340

4,500,000

10,530

22/07/2015JMJ Financial #4

0.001920

3,700,000

7,104

29/07/2015LG Capital #2

0.010540

1,486,470

15667.4

07/07/2015LG Capital #3

0.002852

5,510,767

15,717

22/07/2015LG Capital #4

0.001178

9,814,728

11,562

06/08/2015LG Capital #5

0.000868

13,369,988

11,605

24/08/2015LG Capital #6

0.000806

14,419,392

11,622

31/08/2015LG Capital #7

0.000806

13,133,014

10,585

09/09/2015LG Capital #8

0.000806

14,467,245

11,661

16/09/2015LG Capital #9

0.000806

14,494,168

11,682

25/09/2015RDW Capital (Redwood) #1

0.007500

3,545,000

26,588

13/07/2015RDW Capital (Redwood) #2

0.002520

4,000,000

10,080

17/07/2015RDW Capital (Redwood) #3

0.002280

5,300,000

12,084

22/07/2015RDW Capital (Redwood) #4

0.002280

5,600,000

12,768

23/07/2015RDW Capital (Redwood) #5

0.001980

5,960,000

11,801

27/07/2015RDW Capital (Redwood) #6

0.001380

9,500,000

13,110

31/07/2015RDW Capital (Redwood) #7

0.001200

10,000,000

12,000

03/08/2015RDW Capital (Redwood) #8

0.001100

1,427,000

1,570

06/08/2015SBI (Sea Otter) #2

0.001700

7,383,902

12,553

28/07/2015SBI (Sea Otter) #3

0.001000

11,903,343

11,903

05/08/2015SBI (Sea Otter) #4

0.001000

6,294,583

6,295

14/09/2015SBI (Sea Otter) #5

0.001000

21,103,453

21,103

21/09/2015Tangiers Investment Group #1

0.001976

11,133,603

22,000

23/07/2015Tangiers Investment Group #2

0.001716

11,655,012

20,000

28/07/2015Tangiers Investment Group #3

0.001612

9,821,884

15,833

30/07/2015Union Capital #1

0.000806

3,132,122

2,524

17/09/2015Bluestem #1

0.000660

15,151,515

10,000

18/09/2015Bluestem #2

0.000660

33,681,818

22,230

22/09/2015GHS Investments #1

0.000780

25,844,000

20,158

23/09/2015Totals:

599,235,955

835,166





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Shares issued for services during the three months ended September 30, 2015





The Company issued 8,000,000 shares for services provided to the Company from two entities and recorded consulting fees of $128,000 based on the grant date fair value of the common shares issued.





On September 1, 2015, the Company issued 1,000,000 warrants to a third party. The warrants have a 10-year term and have an exercise price of $0.001 per share.




Shares issued subsequent to the three months ended September 30, 2015:





Subsequent to September 30, 2015 the Company issued a total of  532,370,521 shares in respect of conversion notices received for a total of $279,513 in principal and interest related to various Convertbile Notes as discussed in the financial statements included herein.


All of the foregoing issuances of securities were made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended for transactions by an issuer not involving a public offering, pursuant to Rule 506 of Regulation D, or pursuant to benefit plans and contracts relating to compensation as provided under Rule 701.





ITEM 3. DEFAULTS UPON SENIOR SECURITIES





None.





ITEM 4. MINE SAFETY DISCLOSURES





Not applicable.





ITEM 5. OTHER INFORMATION





Convertible Notes





On July 10, 2015, the Company issued RDW Capital LLC (“RDW”) two10% convertible promissory notes in the principal amount of $100,000 due January 10, 2016 (the “RDW Notes”). The RDW Notes are convertible at RDW’s option into common stock of the Company at a conversion price equal to 50% of the lowest bid price in the 20 days immediately preceding the date of conversion.





On July 13, 2015, the Company issued to VGI an 8% convertible promissory note in the principal amount of $79,000 due April 14, 2016 (the “Third VGI Note”). The Third VGI Note is convertible by VGI, at its option, any time after 180 days from the date of issuance at a conversion price equal to 50% of the average of the three lowest trading prices for our common stock during the twenty-day trading period prior to the date on which VGI provides us with a conversion notice.





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On July 20, 2015 and September 3, 2015, the Company issued to LG 8% convertible promissory notes in the principal amount of $86,225 due on July 20, 2016 (“LG #2 Note), in the principal amount of $127,050 due on September 3, 2016 (“LG #3 Note) and in the principal amount of $70,000 due September 3, 2016, respectively.





These above notes are convertible by LG, at its option, any time after 180 days from the date of issuance at a conversion price equal to 62% of the lowest closing bid price for our common stock for the twenty trading days prior to the date upon which LG provides us with a notice of conversion. The LG #12 and #3 Notes may be prepaid by us any time within 180 days from the date of issuance at a premium ranging from 115% for a prepayment within the initial 30 days to 145% for a prepayment after 150 days from the date of issuance but on or prior to 180 days from the date of issuance. The prepayment premium for the 31-60 day period is 121%, for the 61-90 day period is 127%, for the 91-120 day period is 133%, and for the 121-150 day period is 139%. The LG #2 and #3 Notes become immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties.





On July 27, 2015, the Adar Note was assigned by the Company to Carebourn Capital LLC. (ref Note 5 (k) to the financial statements contained herein).





On August 6, 2015, the balance of principal in the amount of $107,000 of the FireRock Note was assigned by the Company to Carebourn Capital LLC. (ref Note 5 (n) to the financial statements contained herein).





On September 14, 2015, a convertible note purchase agreement was entered into between River North Equity, LLC (ref (p)) (the “Seller”) and Bluestem Advisors LLC (the “Purchaser”). Under the convertible note purchase agreement, the Seller , who held a certain convertible promissory note dated March 18, 2015(the Note”) in the original principal amount of $52,500 wishes to sell and the Purchaser wishes to purchase the Note. On September 18, 2015, the convertible note purchase agreement was closed. The Note is a 9% convertible promissory note due on March 18, 2016 in the principal amount of $52,500 and is convertible by the note holder, at its option, any time after 180 days from issuance at a conversion price equal to 60% of the lowest trading price for our common stock during the twenty trading days prior to the date on which the note holder provides us with a conversion notice. The conversion price formula will be reduced from 60% to 50% if the Company is not DWAC eligible.





On September 14, 2015 the River North Note was assigned to Bluestem Advisors LLC. (ref Note 5 (q) to the financial statements contained herein).





On September 18, 2015 the Peak One note was assigned by the Company to LG Capital Funding, LLC. (ref Note 5 (o) to the financial statements contained herein).





On September 18, 2015 the CBP Note 1 and CBP Note 2 were assigned by the Company to Carebourn Capital LLC. (ref Note 5 (l) to the financial statements contained herein).





On September 22, 2015 the EMA Note was assigned by the Company to SBI Investments LLC. (ref Note 5 (m) to the financial statements contained herein).





On September 22, 2015 the balance of $41,580 in principal plus accrued interest in the Union Note (ref Note 5 (s) to the financial statements contained herein) was assigned to GHS Investments, LLC.





On September 23, 2015, the Company issued GHS Investments, LLC (“GHS”) an 8% convertible promissory note in the principal amount of $63,412 due March 3, 2016. The note is convertible at GHS’s option into common stock of the Company at a conversion price equal to 60% of the lowest closing price during the 20 trading days immediately preceding the date of conversion. The conversion price has a floor of $0.0005.





During the three months ended September 30, 2015, the Company issued several convertible promissory notes to Carebourn Capital LLC (“Carebourn”) for total principal of $381,281, which are convertible at Carebourn’s option into common stock of the Company at a conversion price equal to 50% of the average of the lowest three trading prices of the Company’s common stock during the 20 trading days immediately preceding the date of conversion.





During the three months ended September 30, 2015, the Company issued three several convertible promissory notes to SBI Investments LLC (“SBI”) with total principal of $204,835, convertible at SBI’s option into common stock of the Company at a conversion price equal to 50% of the lowest bid price 20 days immediately preceding the date of conversion.





On September 30, 2015, the Company issued Bluestem a 10% convertible promissory note in the principal amount of $27,778 due September 30, 2016. The note is convertible at Bluestem’s option into common stock of the Company at a conversion price equal to 45% of the lowest bid price during the 20 trading days immediately preceding the date of conversion.





Change in Registered Public Accounting Firm





On October 16, 2015 the Company notified its independent registered public accounting firm, GBH CPAs, PC (“GBH”), that the Company had decided to change auditors and was therefore dismissing GBH, effective immediately.  The Company’s decision was approved by the Company’s board of directors, acting as the audit committee, on that same day, and concurrent with GBH’s dismissal, the board of directors appointed BF Borgers CPA PC (“Borgers”) as the Company’s new independent registered public accounting firm.





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ITEM 6. EXHIBITS





In reviewing the agreements included as exhibits to this Form 10-Q, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreements. The agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the parties to the applicable agreement and:






should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;






have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;






may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and






were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.





Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere in this Form 10-Q and the Company’s other public filings, which are available without charge through the SEC’s website at http://www.sec.gov.





The following exhibits are included as part of this report:





Exhibit

Number

Description of Exhibit31.1*

Certification of Principal Executive Officer and Pursuant to Rule 13a-1431.2*

Certification of Principal Financial Officer Pursuant to Rule 13a-1432.1*

CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act32.2*

CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley ActIneractive Data Files101.INS**

XBRL Instance Document101.SCH**

XBRL Taxonomy Extension Schema Document101.CAL**

XBRL Taxonomy Extension Calculation Linkbase Document101.LAB**

XBRL Taxonomy Extension Labels Linkbase Document101.PRE**

XBRL Taxonomy Extension Presentation Linkbase Document101.DEF**

XBRL Taxonomy Extension Definition Linkbase Document





*Filed herewith


** To be filed by amendment


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SIGNATURES





In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.








EVENTURE INTERACTIVE, INC.November 23, 2015
By:
/s/ Jason HarveyJason Harvey

Chief Executive OfficerNovember 23, 2015
By:
/s/ Michael D. RountreeMichael D. Rountree

Chief Financial Officer








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