NEW COLOMBIA RESOURCES INC

On September 5, 2014, the Company issued a convertible promissory note to a third party in the amount of $37,500.  The note accrues interest at the rate of 8% per annum and has a maturity date of June 9, 2015.  The note is convertible after 180 days from the date of issuance at 55% of the average lowest three-day trading price of common stock during the 10 days preceding the date of conversion.  Loan proceeds amounting to $11,000 were paid directly to service providers at the time of issuance.  On March 4, 2015, the loan became convertible and a related derivative liability was recorded (See Note 10).  On March 10, 2015, the third party converted $12,000 of the principal amount of the note into 2,181,818 shares of the Company’s common stock.  Principal and accrued interest was $25,500 and $1,646 as of March 31, 2015, respectively.  Principal and accrued interest was $37,500 and $962 as of December 31, 2014, respectively.  For the three months ended March 31, 2015, the amortization of the related discount from this convertible note was $19,098, with the unamortized discount being $18,402 as of March 31, 2015.

On September 18, 2014, the Company issued a convertible promissory note to a third party in the total amount of $50,000.  The note accrues interest at the rate of 8% per annum and has a maturity date of September 24, 2015.  The note is convertible into common stock at a discount of 50%.  Loan proceeds amounting to $2,500 were paid directly to service providers at the time of issuance.  On March 25, 2015, the loan became convertible, and the third party converted $12,500 of the principal amount of the note into 3,125,000 shares of the Company’s common stock.  Concurrently, a related derivative liability was recorded (See Note 10).  Principal and accrued interest was $37,500 and $1,641 as of March 31, 2015, respectively. Principal and accrued interest was $50,000 and $1,140 as of December 31, 2014, respectively.  For the three months ended March 31, 2015, the amortization of the related discount from this convertible note was $13,927, with the unamortized discount being $36,073 as of March 31, 2015.

On April 14, 2008, the Company signed a loan agreement in which it borrowed an aggregate of $328,000 from Ararat, LLC, a Company owned by a family member of Kyle Gotshalk (a former officer).  The note originally matured on December 31, 2012 and carried a 10% interest rate.  On November 14, 2012, the Company restructured the debt into a new convertible note, which does not accrue interest.  The lender has the right to convert the loan within twenty-four months at a price of $0.30 per share.  Any net proceeds from the stock currently held by the lender or by the preferred shareholder which are liquidated within the next twenty-four months will be credited against the loan.  At the end of the twenty-four months, the lender has the right to demand stock as payment of the debt at 90% of the bid price for the preceding ten-day weighted average.  The lender will not be subject to the floor price of $0.30 after November 15, 2014.  The Company evaluated the aforementioned debt modification under FASB ASC 470-50 and determined that the modification qualified as an extinguishment of debt due to substantial modifications, which included, an extension of the maturity date, the modification of the interest rate, and the modification of the conversion price.  In accordance with FASB ASC 470-50-40-2, the extinguishment of debt was accounted for as an increase in the principal in the amount of $20,634, resulting in a loss on debt restructuring for that same amount.  The resulting derivative liability was reclassified and accounted for as an increase to additional paid-in capital.

On January 2, 2015, the Company entered into a consulting agreement with Kyle Gotshalk (the “Consultant”) (a former officer).  This agreement was an amendment to an original consulting agreement dated January 1, 2013.  As per the 2015 agreement, the Company agrees to compensate the Consultant with an amount of shares of the Company’s common stock equal to an amount of approximately $12,500 each quarter.  However, if the stock price reaches $0.25, then 100,000 shares of the Company’s common stock would be issued.  Should the stock price change, then the Company will adjust the amount of shares issued at a five-day average price, or an approximation of what the Company and the Consultant agree to be fair and correct, so as to ensure that the total amount of shares issued shall equal approximately $25,000 each six months, or an equally agreed upon number of shares, as determined between the Company and the Consultant.  The 2015 agreement has a term of two years, until January 2, 2017, with an option to extend at that time.  

On September 18, 2014, the Company issued a convertible promissory note to a third party in the total amount of $50,000 (See Note 6).  The note is convertible into common stock at a discount of 50%.  On March 25, 2015, the note became convertible.  The Company analyzed these conversion options under ASC 815 “Derivatives and Hedging,” and determined that these instruments should be classified as liabilities and recorded at fair value.  The derivative liability had a fair value of $65,089 as of March 25, 2015.  As a result, a discount of $50,000, an initial loss of $15,089, and a derivative liability of $65,089 were recorded.  On the same day the note became convertible, the third party converted $12,500 of the principal amount of the note into 3,125,000 shares of the Company’s common stock, resulting in a change of $ 16,272.  The change was included as a component of additional paid-in capital.  As of March 31, 2015, the fair value of the derivatives was $48,214, and the change in the fair value during the period from March 25, 2015 to March 31, 2015 resulted in a recorded gain on fair value of the derivative liability of $603.  This resulted in a net loss of $14,486 for the period from March 25, 2015 to March 31, 2015.  For the period from March 25, 2015 to March 31, 2015, the Company also amortized the discount on the note for $13,927, with the unamortized discount being $36,073 as of March 31, 2015.