News Column

MIND SOLUTIONS INC. - 10-Q - Management's Discussion and Analysis of Financial Condition and Results of Operations.

August 8, 2014

THE FOLLOWING DISCUSSION SHOULD BE READ TOGETHER WITH THE INFORMATION CONTAINED IN THE FINANCIAL STATEMENTS AND RELATED NOTES INCLUDED ELSEWHERE IN THIS REPORT ON FORM 10-Q.

The following discussion reflects our plan of operation. This discussion should be read in conjunction with the financial statements which are included in this Report. This discussion contains forward-looking statements, including statements regarding our expected financial position, business and financing plans. These statements involve risks and uncertainties. Our actual results could differ materially from the results described in or implied by these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Report.

Unless the context otherwise suggests, "we," "our," "us," and similar terms, as well as references to "VOIS" and "Mind Solutions," all refer to Mind Solutions as of the date of this report.

Mind Solutions has successfully developed software applications described below that run on Emotive EEG headsets. We have experienced minimal sales of our software applications. It was decided by management that to better position Mind Solutions in the market, we should develop our own unique EEG headset that would allow us to have more market strength. We have invested a significant amount of money and time into developing a prototype EEG headset. We have completed a prototype which has been successfully tested on several Android devices and tablets.

On August 1, 2012, Dr. Gordon Chiu, our chief scientific adviser, filed an International Patent Application No. PCT/US2012/049135. Generally, the proprietary technology we are using consists of a "Portable Brain Activity Monitor." On February 12, 2011, Mind Technology, Inc., one of our predecessors, and Dr. Gordon Chiu, our chief science advisor, granted us a license to use the technology covered by his patent application. Through the series of mergers described in this report, Mind Solutions acquired the license granted to Mind Technology, Inc. For the period, that Mind Technology, Inc. (now Mind Solutions) exists and funds the development and progress of the covered invention, Dr. Chiu agreed to license the use of the technology to Mind Solutions. If Mind Solutions fails to support the launch, progress and/or funding of the production of the invention, then the license may be terminated. The agreement provided that Dr. Chiu will receive a non-refundable, non-dilatable cash royalty payment equal to 20% of the gross proceeds received by Mind Solutions from the use of the covered technology. In addition, Brent Fouch, the former president of Mind Technology, and one of our advisors, will receive a non-refundable, non-dilatable cash royalty payment equal to 5% of the gross proceeds received by Mind Solutions from the use of the covered technology. See "Business - Patents and Intellectual Property."

We believe a minimum of $350,000 is still needed to complete the EEG device, which will cover costs associated with the SDK (operating system), the design work to create a sleek, consumer-friendly final product and updates on the hardware including Bluetooth wireless updates. We have announced our desire to partner with a larger technology firm to invest in the completion of the EEG headset in return for a negotiated interest in the product. If successful, we will not need to raise this capital to complete the project. If we are not successful in attracting a financial partner to assist in the completion of the EEG headset, we plans to raise funds by means of an equity offering to raise the necessary capital to complete the project.

Mind Solutions currently has a need of approximately $20,000 per month to sustain operations until sales of the software and anticipated sales of the EEG headset increase.

18 Going Concern



As of June 30, 2014, the Company had an accumulated deficit during development stage of $25,226,522 which included a net loss of $1,403,674 reported for the six months ended June 30, 2014. Also, during the six months ended June 30, 2014 the Company used net cash of $351,172 for operating activities. These factors raise substantial doubt about the Company's ability to continue as a going concern.

While the Company is attempting to commence operations and generate revenues, the Company's cash position may not be significant enough to support the Company's daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate revenues.

Three Months Ended June 30, 2014 Compared to Three Months Ended June 30, 2013.

Revenues. During the three months ended June 30, 2014 and 2013 the Company recognized $18,889 and $0 of revenues. The $18,889 of service revenues recognized was from the Company receiving stock in a costumer as payment for consulting services. The customer is a publicly traded company on the OTCQB. We are aggressively looking for ways to leverage our technology to develop revenue streams.

General and Administrative Expenses.

Consulting Fees. During the three months ended June 30, 2014, consulting expense decreased to $220,292 as compared to $220,378 from the prior three months ended June 30, 2013. The decrease was primarily the result of less stock being issued to consultants for services rendered to the Company.

Professional Fees. During the three months ended June 30, 2014, professional fees increased to $51,063 as compared to $30,317 from the prior three months ended June 30, 2013. Professional fees increased primarily from the legal and accounting services needed to draft a Form S-1 registration statement.

Selling, General and Administrative Expense. During the three months ended June 30, 2014, selling, general and administrative expenses increased to $45,553 as compared to $8,960 from the prior three months ended June 30, 2013. The increase was due primarily to more travel, meals & entertainment, and marketing expenses.

Interest Expense. During the three months ended June 30, 2014, interest expense increased to $16,533 as compared to $13,115 from the prior three months ended June 30, 2013. The increase was due to additional interest expense accrued pertaining to the outstanding notes payable.

Derivative interest. During the three months ended June 30, 2014, derivative interest expense increased to $1,070,233 as compared to $93,784 from the prior three months ended June 30, 2013. The increase was due to additional derivative liability calculated using the Black Scholes Model regarding the newly issued convertible debentures.

Net Loss. Our net loss from operations increased to $1,403,674 for the three months ended June 30, 2014 and $366,554 for the three months ended June 30, 2013.

Six Months Ended June 30, 2014 Compared to Six Months Ended June 30, 2013.

Revenues. During the six months ended June 30, 2014 and 2013 the Company recognized $50,000 and $0 of revenues. The $50,000 of service revenues recognized was from the Company receiving stock in a costumer as payment for consulting services. The customer is a publically traded company on the OTCQB. We are aggressively looking for ways to leverage our technology to develop revenue streams.

General and Administrative Expenses.

19



Consulting Fees. During the six months ended June 30, 2014, consulting expense decreased to $618,526 as compared to $1,105,492 from the prior six months ended June 30, 2013. The decrease was primarily the result of less stock being issued to consultants for services rendered to the Company.

Professional Fees. During the six months ended June 30, 2014, professional fees increased to $92,425 as compared to $90,939 from the prior six months ended June 30, 2013. Professional fees increased primarily from the legal and accounting services needed to draft a Form S-1 registration statement.

Selling, General and Administrative Expense. During the six months ended June 30, 2014, selling, general administrative expenses increased to $75,379 as compared to $18,023 from the prior six months ended June 30, 2013. The increase was due primarily to more travel, meals & entertainment, and marketing expenses.

Interest Expense. During the six months ended June 30, 2014, interest expense increased to $34,170 as compared to $22,900 from the prior six months ended June 30, 2013. The increase was due to additional interest expense accrued pertaining to the outstanding notes payable.

Derivative interest. During the six months ended June 30, 2014, derivative interest expense increased to $1,070,233 as compared to $134,787 from the prior six months ended June 30, 2013. The increase was due to additional derivative liability calculated using the Black Scholes Model regarding the newly issued convertible debentures.

Forgiveness of debt. During the six months ended June 30, 2014, forgiveness of debt was $0 as compared to $111,610 for the six months ended June 30, 2013. The decrease was due to the dissolution of an affiliated entity to the Company's which was recorded as an accounts payable to related parties

Net Loss. Our net loss from operations increased to $1,840,733 for the six months ended June 30, 2014 and $1,260,531 for the six months ended June 30, 2013.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate adequate amounts of cash to meet its needs for cash. The following table provides certain selected balance sheet comparisons between June 30, 2014 and December 31, 2013:

June 30, December 31, $ % 2014 2013 Change Change Working Capital $ (7,922,134)$ (20,639,541)$ 12,717,407 61.6% Cash 150,820 47,428 103,392 Over 100% Total current assets 282,217 336,978 (54,761) (16.3)% Total assets 298,905 339,396 (40,491) (11.9)% Accounts payable and accrued liabilities 384,869 398,359 13,490 3.4% Notes payable and accrued interest 599,918 670,918 71,000 10.6 % Total current liabilities 8,204,351 20,976,519 (12,772,168) (60.9) % Total liabilities 8,204,351 20,976,519 (12,772,168) (60.9)%



At June 30, 2014, our working capital deficit decreased as compared to December 31, 2013, primarily as a result of a decrease in derivative liability of $12,992,152.

Operating activities

Net cash used for continuing operating activities during the six months ended June 30, 2014 was $351,172 as compared to $173,611 for the six months ended June 30, 2013. Non-cash items totaling approximately $1,489,561 contributing to the net cash used in continuing operating activities for the six months ended June 30, 2014 include:

20 $354,738 representing the value of shares issued to consultants and officers, $1,070,233 increase in derivative liability, $50,000 in service revenues from available-for-sale securities, $1,166 of depreciation, $13,424 increase in accounts payable and accrued expenses



Net cash used for continuing operating activities for the six months ended June 30, 2013 was $173,611. Non-cash items totaling approximately $1,086,920 contributing to the net cash used in continuing operating activities for the six months ended June 30, 2013 include:

$829,900 representing the value of shares issued for consulting services, $103,325 of derivative expense from outstanding convertible notes payable $480,000 in available for sale securities compensation $111,610 in forgiveness of debt $1,520 of depreciation, $233,943 in accounts payable and accrued expenses $17,728 in accounts payable to related parties



Investing activities

Net cash used in investing activities was $2,936 and $0 for both six months ended June 30, 2014 and 2013.

Cash from Financing Activities

Net cash provided by financing activities was $457,500 for the six months ended June 30, 2014. This included $457,500 from proceeds from convertible notes.

Net cash provided by financing activities was $217,295 for the six months ended June 30, 2013. During the six months ended June 30, 2013, we generated $202,000 from the issuance of convertible notes payable, $48,100 in notes to related parties, and paid $32,805 on notes to related parties. See "Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities - Recent Sales of Unregistered Securities."

IBC Funds, LLC. Financing

On November 21, 2013, IBC Funds, LLC, a Nevada limited liability company, acquired by assignment, debts owed by Mind Solutions to four creditors in the amount of $82,845.63. Likewise, on November 21, 2013, IBC Funds and Mind Solutions executed that certain Settlement Agreement and Stipulation, whereby Mind Solutions agreed to settle the debt of $82,845.63, and to pay the debt by the issuance of shares pursuant to Section 3(a)(10) of the Securities Act, which provides that the issuance of shares are exempt from the registration requirement of Section 5 of the Securities Act. In relevant part, Section 3(a)(10) of the Securities Act provides an exemption from the registration requirement for securities: (i) which are issued in exchange for a bona fide claim, (ii) where the terms of the issuance and exchange are found by a court to be fair to those receiving shares, (iii) notice of the hearing is provided to those to receive shares and they are afforded the opportunity to be heard, (iv) the issuer must advise the court prior to its hearing that it intends to rely on the exemption provided in Section 3(a)(10) of the Securities Act, and (v) there cannot be any impediments to the appearance of interested parties at the hearing.

On November 22, 2013, in a court proceeding styled IBC Funds, LLC, a Nevada limited Liability Company, Plaintiff vs. Mind Solutions, Inc., a Nevada corporation, Defendant, bearing Civil Action No. 2013 CA 008370 NC, in the Circuit Court in the Twelfth Judicial Circuit in and for Sarasota County, Florida, after due notice, the court entered an order approving the Settlement Agreement and Stipulation. In satisfaction of the debt, we agreed to issue shares of our common stock in one or more tranches to IBC Funds in the manner contemplated in the Settlement Agreement and Stipulation at a conversion price of $0.0045 per share. In accordance with the terms of the Settlement Agreement and Stipulation, the court was advised of our intention to rely upon the exception to registration set forth in Section 3(a)(l0) of the Securities Act to support the issuance of the shares.

As set forth in the order, the court found that the terms and conditions of the exchange were fair to Mind Solutions and IBC Funds within the meaning of Section 3(a)(10) of the Securities Act, and that the exchange of the debt for our securities was not made under Title 11 of the United States Code.

As permitted by the court order and the Settlement Agreement and Stipulation, we issued 77,298,674 post reverse split shares of our common stock to IBC Funds, LLC. The shares were issued free of any restrictions as permitted by Section 3(a)(10) of the Securities Act.

Hanover Holdings I, LLC Financing

In 2013, we executed various Securities Purchase Agreements with Hanover Holdings I, LLC, whereby we issued convertible promissory notes to Hanover Holdings I, LLC bearing interest on the unpaid balance at the rate of 10 percent, as follows:

Convertible promissory note dated February 4, 2013, in the original principal

amount of $16,500. As a result of a conversion of the note, we issued 159,659 shares of our common stock to Hanover Holdings I, LLC. As of the date hereof, the note is paid in full.



Convertible promissory note dated March 7, 2013, in the original principal

amount of $16,500. As a result of a conversion of the note, we issued 304,379 shares of our common stock to Hanover Holdings I, LLC. As of the date hereof, the note is paid in full.



Convertible promissory note dated June 5, 2013, in the original principal

amount of $41,500. As a result of a conversion of the note, we issued 58,085,830 shares of our common stock to Hanover Holdings I, LLC. As of the date hereof, the note is paid in full.



Convertible promissory note dated August 7, 2013, in the original principal

amount of $26,500. As a result of a conversion of the note, we issued

17,084,482 shares of our common stock to Hanover Holdings I, LLC. As of the

date hereof, the note is paid in full.

21



Convertible promissory note dated November 23, 2013, in the original principal

amount of $26,500. As of the date hereof, $26,500 remains unpaid on the note.

Each of the notes was convertible into shares of our common stock by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion. The term "Conversion Amount" means, with respect to any conversion of a note, the sum of (1) the principal amount of the note to be converted in such conversion plus (2) at Hanover Holdings I, LLC's option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in the note to the Conversion Date; provided, however, that Mind Solutions shall have the right to pay any or all interest in cash plus (3) at our option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at Hanover Holdings I, LLC's option, any amounts owed to Hanover Holdings I, LLC under the note.

The conversion price (the "Conversion Price") shall be the Variable Conversion Price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by Mind Solutions relating to our securities or the securities of any subsidiary of Mind Solutions, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean 55% multiplied by the Market Price (as defined in the note) but in no event shall the Conversion Price be less than $0.00004. "Market Price" means the lowest Trading Price (as defined below) for our common stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. "Trading Price" means, for any security as of any date, the lowest trading price on the Over-the-Counter Bulletin Board, or applicable trading market (the "OTCBB") as reported by a reliable reporting service ("Reporting Service") mutually acceptable to Mind Solutions and Hanover Holdings I, LLC (i.e., Bloomberg). If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by Mind Solutions and the holders of a majority in interest of the notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such notes.

"Trading Day" shall mean any day on which our common stock is traded for any period on the OTCBB, or on the principal securities exchange or other securities market on which our common stock is then being traded. If our common stock is chilled for deposit at DTC and/or becomes chilled at any point while the note remains outstanding, an additional 8% discount will be attributed to the Conversion Price defined in the note. If Mind Solutions is unable to issue any shares under this provision due to the fact that there is an insufficient number of authorized and unissued shares available, Hanover Holdings I, LLC promises not to force Mind Solutions to issue these shares or trigger an Event of Default, provided that Mind Solutions takes immediate steps required to get the appropriate level of approval from shareholders or the board of directors, where applicable to raise the number of authorized shares to satisfy the Notice of Conversion.

All shares of our common stock issued to Hanover Holdings I, LLC were restricted in their transfer, pursuant to the Securities Act. In addition, all shares of our common stock which were issued to Hanover Holdings I, LLC have been adjusted to take into account the one for 2,000 reverse split of the shares of our common stock which occurred on October 31, 2013.

The note further provides for anti-dilution adjustments in favor of Hanover Holdings I, LLC, in the event we offer additional shares of our common stock.

Copies of the Securities Purchase Agreements and convertible notes in favor of Hanover Holdings I, LLC were filed as exhibits with the SEC.

Asher Enterprises, Inc. Financing

In 2012, 2013, and 2014, we executed various Securities Purchase Agreements with Asher Enterprises, Inc., whereby we issued convertible promissory notes to Asher Enterprises, Inc. bearing interest on the unpaid balance at the rate of eight percent, as follows:

Convertible promissory note dated December 26, 2012, in the original principal

amount of $32,500. As a result of a conversion of the note, we issued 44,402 shares of our common stock to Asher Enterprises, Inc. As of the date hereof, the note is paid in full.



Convertible promissory note dated March 1, 2013, in the original principal

amount of $32,500. As a result of a conversion of the note, we issued 583,992

shares of our common stock to Asher Enterprises, Inc. As of the date hereof,

the note is paid in full.

22



Convertible promissory note dated April 18, 2013, in the original principal

amount of $32,500. As a result of a conversion of the note, we issued 10,836,925 shares of our common stock to Asher Enterprises, Inc. As of the date hereof, the note is paid in full.



Convertible promissory note dated November 7, 2013, in the original principal

amount of $42,500. As of the date hereof, the note is paid in full.

Convertible promissory note dated February 6, 2014, in the original principal

amount of $37,500. As of the date hereof, $37,500 remains unpaid.

Each of the notes was convertible into shares of our common stock by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion. The term "Conversion Amount" means, with respect to any conversion of a note, the sum of (1) the principal amount of the note to be converted in such conversion plus (2) at Asher Enterprises, Inc.'s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in the note to the Conversion Date; provided, however, that Mind Solutions shall have the right to pay any or all interest in cash plus (3) at our option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at Asher Enterprises, Inc.'s option, any amounts owed to Asher Enterprises, Inc. under the note.

The conversion price (the "Conversion Price") shall be the Variable Conversion Price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by Mind Solutions relating to our securities or the securities of any subsidiary of Mind Solutions, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean 55% multiplied by the Market Price (as defined in the note) but in no event shall the Conversion Price be less than $0.00004. "Market Price" means the lowest Trading Price (as defined below) for our common stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. "Trading Price" means, for any security as of any date, the lowest trading price on the Over-the-Counter Bulletin Board, or applicable trading market (the "OTCBB") as reported by a reliable reporting service ("Reporting Service") mutually acceptable to Mind Solutions and Asher Enterprises, Inc. (i.e., Bloomberg). If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by Mind Solutions and the holders of a majority in interest of the notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such notes.

"Trading Day" shall mean any day on which our common stock is traded for any period on the OTCBB, or on the principal securities exchange or other securities market on which our common stock is then being traded. If our common stock is chilled for deposit at DTC and/or becomes chilled at any point while the note remains outstanding, an additional 8% discount will be attributed to the Conversion Price defined in the note. If Mind Solutions is unable to issue any shares under this provision due to the fact that there is an insufficient number of authorized and unissued shares available, Asher Enterprises, Inc. promises not to force Mind Solutions to issue these shares or trigger an Event of Default, provided that Mind Solutions takes immediate steps required to get the appropriate level of approval from shareholders or the board of directors, where applicable to raise the number of authorized shares to satisfy the Notice of Conversion.

All shares of our common stock issued to Asher Enterprises, Inc. were restricted in their transfer, pursuant to the Securities Act. In addition, all shares of our common stock which were issued to Asher Enterprises, Inc. have been adjusted to take into account the one for 2,000 reverse split of the shares of our common stock which occurred on October 31, 2013.

The note further provides for anti-dilution adjustments in favor of Asher Enterprises, Inc., in the event we offer additional shares of our common stock.

Copies of the Securities Purchase Agreements and convertible notes in favor of Asher Enterprises, Inc. were filed as exhibits with the SEC.

JMJ Financial Financing

On May 15, 2013, we issued to JMJ Financial our convertible promissory in the amount up to $250,000. As a result of partial conversions of the note, we issued 75,022,674 shares of our common stock to JMJ Financial. On May 15, 2013, we executed a convertible promissory note in favor of JMJ Financial in the amount up to $250,000 bearing interest on the unpaid balance at the rate of 12 percent. While the note was in the original principal amount of $250,000, it was only partially funded on May 15, 2013, over six months ago, in the amount of $30,000.00, plus pro-rated original issue discount and pro-rated interest in the amount of $7,333.33, on August 14, 2013, over six months ago, in the amount of $20,000.00, on December 9, 2013, less than six months ago, in the amount of $25,000.00, on April 16, 2014, less than six months ago, in the amount of $40,000 and on June 23, 2014 in the amount of $60,000. After allowing for conversions, only $97,418 of the notes is convertible on the date of this report.

23



The Conversion Price of the note is 60% of the lowest trade price in the 25 trading days previous to the conversion (In the case that conversion shares are not deliverable by DWAC an additional 10% discount will apply; and if the shares are ineligible for deposit into the DTC system and only eligible for)(clearing deposit an additional 5% discount shall apply; in the case of both an additional cumulative 15% discount shall apply). Unless otherwise agreed in writing by both parties, at no time will JMJ Financial convert any amount of the note into common stock that would result in JMJ Financial owning more than 4.99% of the common stock outstanding of the registrant.

JMJ Financial has the right, at any time after 180 days from the effective date of the note, at its election, to convert all or part of the outstanding and unpaid principal sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock of the registrant as per this conversion formula: Number of shares receivable upon conversion equals the dollar conversion amount divided by the Conversion Price.

As of the date hereof, $97,418 of the JMJ Financial note remains unpaid.

All shares of our common stock issued to JMJ Financial were restricted in their transfer, pursuant to the Securities Act. In addition, all shares of our common stock which were issued to JMJ Financial have been adjusted to take into account the one for 2,000 reverse split of the shares of our common stock which occurred on October 31, 2013.

The note further provides for anti-dilution adjustments in favor of JMJ Financial, in the event we offer additional shares of our common stock.

LG Capital Funding, LLC Financing

On February 4, 2014, we executed a Securities Purchase Agreement with LG Capital Funding, LLC, whereby we issued convertible promissory notes in an aggregate amount of $50,000 to LG Capital Funding, LLC bearing interest on the unpaid balance at the rate of 10 percent, as follows:

Convertible promissory note dated February 4, 2014, in the original principal

amount of $25,000. On February 25, 2014, we issued a $25,000 convertible note with interest of 10 percent per annum, unsecured, and due February 25, 2015. The note is convertible into shares of our common stock at any time from the date of issuance at a conversion rate of 55 percent of the market price, calculated as the lowest trading price in the previous 10 days leading up to the date of conversion.



Convertible promissory note dated February 4, 2014, in the original principal

amount of $25,000. On February 25, 2014, we issued a $25,000 convertible note

with interest of 10 percent per annum, unsecured, and due February 25, 2015.

The note is convertible into shares of our common stock at any time from the

date of issuance at a conversion rate of 55 percent of the market price,

calculated as the lowest trading price in the previous 10 days leading up to

the date of conversion.

On March 25, 2014, we executed a Securities Purchase Agreement with LG Capital Funding, LLC, whereby we issued a convertible promissory note in the amount of $40,000 to LG Capital Funding, LLC bearing interest on the unpaid balance at the rate of 10 percent. On March 25, 2014, we issued a $40,000 convertible note unsecured and due February 25, 2015. The note is convertible into shares of our common stock at any time from the date of issuance at a conversion rate of 55 percent of the market price, calculated as the lowest trading price in the previous 10 days leading up to the date of conversion.

A copy of the Securities Purchase Agreement and the convertible promissory note in favor of LG Capital Funding, LLC was filed as an exhibit with the SEC.

GEL Properties, LLC Financing

On February 4, 2014, we issued a convertible promissory note to GEL Properties, LLC bearing interest on the unpaid balance at the rate of 10 percent, in the original principal amount of $25,000. The note is unsecured, and due February 4, 2015, and is convertible into shares of our common stock at any time from the date of issuance at a conversion rate of 55 percent of the market price, calculated as the lowest trading price in the previous 10 days leading up to the date of conversion.

A copy of the convertible promissory note in favor of GEL Properties, LLC was filed as an exhibit with the SEC.

Premier Venture Partners, LLC.

On March 11, 2013, Mind Solutions and Premier Venture Partners, LLC, a California Limited Partnership executed that certain Equity Purchase Agreement with respect to the resale of up to 200,000,000 shares of our common stock by Premier pursuant to a "put right." The Equity Purchase Agreement permits us to "put" up to $1,000,000 in shares of our common stock to Premier. Moreover, we also agreed to register the resale by Premier of an additional 12,765,957 shares of our common stock issued as Initial Commitment Shares in connection with the Equity Purchase Agreement. We will not receive any proceeds from the sale of the shares of our common stock offered by Premier. However, we will receive proceeds from the sale of securities pursuant to our exercise of the put right described in the Equity Purchase Agreement. We will bear all costs associated with the registration.

We have assumed that we will issue not more than 187,234,043 shares pursuant to the exercise of our put right under the Equity Purchase Agreement, although the number of shares that we will actually issue pursuant to that put right may be more or less than 187,234,043, depending on the trading price of our common stock. We currently do not intend to exercise the put right in a manner which would result in our issuance of more than 187,234,043 shares, but if we were to exercise the put right in that manner, we would be required to file a subsequent registration statement with the SEC and that registration statement would have to be declared effective prior to the issuance of any additional shares.

Notwithstanding anything to the contrary in the Equity Purchase Agreement, in no event shall Premier be entitled to purchase that number of shares our common stock, which when added to the sum of the number of shares of our common stock beneficially owned (as such term is defined under Section 13(d) and Rule 13d-3 of the Exchange Act), by Premier, would exceed 4.99 percent of the number of shares of our common stock outstanding on the a Closing Date under the Equity Purchase Agreement, as determined in accordance with Rule 13d-1(j) of the Exchange Act.

24



Subject to the terms and conditions of the transaction documents, as described in the Equity Purchase Agreement, and from time to time during the Open Period, Mind Solutions may, in its sole discretion, deliver a Put Notice to Premier which states the number of shares of our common stock that Mind Solutions intends to sell to Premier on a Closing Date (the "Put"). The maximum number of shares of our common stock that Mind Solutions shall be entitled to Put to Premier per any applicable Put Notice (the "Put Amount") shall not exceed the lesser of:

200% of the average daily trading volume of our common stock on the five

Trading Days prior to the date the Put Notice is received by Premier; and

120% of any previous Put Amount during the Open Period (or for the first Put

Notice, 9,000,000 shares of our common stock).

Notwithstanding the preceding sentence, the Put Amount cannot exceed 4.99% of the outstanding shares of our common stock of Mind Solutions. During the Open Period, Mind Solutions shall not be entitled to submit a Put Notice until after the previous Closing has been completed.

Premier has indicated that it will resell those shares in the open market, resell our shares to other investors through negotiated transactions, or hold our shares in its portfolio. The obligations of Premier under the Equity Purchase Agreement are not transferable.

Notwithstanding anything to the contrary in Equity Purchase Agreement, Mind Solutions shall not be entitled to deliver a Put Notice and Premier shall not be obligated to purchase any shares of our common stock at a Closing unless each of the following conditions are satisfied:

A Registration Statement shall have been declared effective and shall remain

effective and available for the resale of all the Registrable Securities (as defined in the Registration Rights Agreement) at all times until the Closing with respect to the subject Put Notice;



At all times during the period beginning on the related Put Notice Date and

ending on and including the related Closing Date, the shares of our common stock (i) shall have been listed or quoted for trading on the Principal Market, (ii) shall not have been suspended from trading thereon, and (iii) Mind Solutions shall not have been notified of any pending or threatened proceeding or other action to suspend the trading of the shares of our common stock;



Mind Solutions has complied with its obligations and is otherwise not in breach

of or in default under, Equity Purchase Agreement, the Registration Rights Agreement or any other agreement executed in connection herewith which has not been cured prior to delivery of Premier's Put Notice Date;



No injunction shall have been issued and remain in force, or action commenced

by a governmental authority which has not been stayed or abandoned, prohibiting

the purchase or the issuance of the Securities; and

The issuance of the Securities will not violate any shareholder approval

requirements of the Principal Market.

If any of the events described above occurs during a Pricing Period, then Premier shall have no obligation to purchase the Put Amount of Common Stock set forth in the applicable Put Notice.

The Purchase Price for the Securities for each Put shall be the Put Amount multiplied by 75% of the lowest individual daily VWAP of the shares of our common stock during the Pricing Period less $650.

The Equity Purchase Agreement will terminate when any of the following events occur:

When Premier has purchased an aggregate of $1,000,000 in the shares of the

common stock of Mind Solutions pursuant to this Agreement;

25



On the date which is 36 months after March 11, 2014;

If no Registration Statement has been declared effective by the SEC within ten

months after March 11, 2014;

If at any time after March 11, 2014, the Registration Statement is no longer in

effect;

The trading of the shares of our common stock is suspended by the SEC, the

Principal Market or FINRA for a period of two consecutive Trading Days during

the Open Period; or,

The shares of our common stock cease to be registered under the Exchange Act or

listed or traded on the Principal Market or the Registration Statement is no longer effective (except as permitted hereunder).. Immediately upon the occurrence of one of the above-described events, Mind Solutions shall send written notice of such event to Premier.



Any and all shares, or penalties, if any, due under the Equity Purchase Agreement shall be immediately payable and due upon termination of the agreement.

As we draw down on the Equity Purchase Agreement, shares of our common stock will be sold into the market by Premier. The sale of these additional shares could cause our stock price to decline. In turn, if the stock price declines and we issue more puts, more shares will come into the market, which could cause a further drop in the stock price. You should be aware that there is an inverse relationship between the market price of our common stock and the number of shares to be issued under the Equity Purchase Agreement. If our stock price declines, we will be required to issue a greater number of shares under the Equity Purchase Agreement. We have no obligation to utilize the full amount available under the Equity Purchase Agreement.

As discussed above, in addition to the shares to be issued pursuant to the Equity Purchase Agreement, we have issued to Premier $39,574 worth of our common stock, or 12,765,957 shares of our common stock as Initial Commitment Shares in connection with the Equity Purchase Agreement, which amount of shares represents 3.0% of $1,000,000 divided by the sum equal to the average of the daily VWAP of our common stock on the three most recent trading days immediately preceding March 11, 2014, multiplied by 75% and with such shares being duly authorized, validly issued, fully paid and nonassessable. "VWAP" means the volume weighted average price (the aggregate sales price of all trades of our common stock during a trading day divided by the total number of shares of our common stock traded during such trading day) of the our common stock during a trading day.

We filed with the SEC a current report on Form 8-K with respect to the Premier Equity Purchase Agreement on March 26, 2014.

On June 27, 2014, we filed a registration statement on Form S-1 in connection with the Premier Equity Purchase Agreement. However, on July 17, 2014, pursuant to Rule 477 of Regulation C promulgated under the Securities Act, we withdrew our registration statement, inasmuch as we received notice from the Securities and Exchange Commission on July 3, 2014, that the Commission's preliminary review of the registration statement indicated that we were not entitled to file the registration statement for our equity line financing, inasmuch as the shares of our common stock are quoted for sale on the OTCPK operated by OTC Market Group, Inc. No securities were sold in connection with the registration statement. As of the date of this report, we have not yet decided on how we are going to proceed with the Premier Equity Purchase Agreement.

Ceasar Capital Group LLC Financing

On April 15, 2014, the Company entered into a securities purchase agreement and convertible promissory note in the amount of $50,000 with Caesar Capital Group LLC with 8% interest per annum, due April 15, 2015. The note holder has the right to convert the note into common shares of the Company after 6 months from the date of the executed note at a discount to market of 45% based on the lowest trading price ten days prior to conversion.

A copy of the Securities Purchase Agreement and the convertible promissory note in favor of Caesar Capital Group LLC was filed as an exhibit with the SEC.

AARG Corp. Fianncing

On April 30, 2014, the Company entered into a securities purchase agreement and convertible promissory note in the amount of $50,000 with ARRG Corp. with 8% interest per annum, due April 30, 2015. The note holder has the right to convert the note into common shares of the Company after 6 months from the date of the executed note at a discount to market of 45% based on the lowest trading price ten days prior to conversion.

26



A copy of the Securities Purchase Agreement and the convertible promissory note in favor of ARRG Corp. was filed as an exhibit with the SEC.

Cicero Consulting Group, LLC Financing

On May 12, 2014, we executed a Consulting Agreement with Cicero Consulting Group, LLC and convertible promissory note in the amount of $200,000 whereby Cicero Consulting Group, LLC will provide management consulting and business advisory services to Mind Solutions over a one year term. We have compensated Cicero Consulting Group, LLC with a $200,000 convertible promissory note which is considered earned in full as of May 12, 2014. The convertible note issued pursuant to the Consulting Agreement may be converted into shares of our common stock after six months from the date of the executed note at a 10 percent discount to market based on the lowest trading price during the 10 trading days prior to the conversion date.

A copy of the Consulting Agreement and the convertible promissory note in favor of Cicero Consulting Group, LLC was filed as an exhibit with the SEC.

KBM Worldwide, Inc. Financing

On May 8, 2014, we executed a Securities Purchase Agreement with KBM Worldwide, Inc., whereby we issued a convertible promissory note dated May 8, 2014, to KBM Worldwide, Inc. bearing interest on the unpaid balance at the rate of eight percent, in the original principal amount of $42,500.

The note is convertible into shares of our common stock by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion. The term "Conversion Amount" means, with respect to any conversion of a note, the sum of (1) the principal amount of the note to be converted in such conversion plus (2) at KBM Worldwide, Inc.'s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in the note to the Conversion Date; provided, however, that Mind Solutions shall have the right to pay any or all interest in cash plus (3) at our option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at KBM Worldwide, Inc.'s option, any amounts owed to KBM Worldwide, Inc. under the note.

The conversion price (the "Conversion Price") shall be the Variable Conversion Price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by Mind Solutions relating to our securities or the securities of any subsidiary of Mind Solutions, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean 51 percent multiplied by the Market Price (as defined in the note). "Market Price" means the average of the lowest three Trading Prices (as defined below) for our common stock during the 30 Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. "Trading Price" means, for any security as of any date, the lowest trading price on the Over-the-Counter Bulletin Board, or applicable trading market (the "OTCBB") as reported by a reliable reporting service ("Reporting Service") mutually acceptable to Mind Solutions and KBM Worldwide, Inc. (i.e., Bloomberg). If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by Mind Solutions and the holders of a majority in interest of the note being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such note.

"Trading Day" shall mean any day on which shares of our common stock are tradable for any period on the OTC, or on the principal securities exchange or other securities market on which shares of our common stock are then being traded.

All shares of our common stock to be issued to KBM Worldwide, Inc. are to be issued free of any restrictions pursuant to Rule 144 under the Securities Act.

The note further provides for anti-dilution adjustments in favor of KBM Worldwide, Inc., in the event we offer additional shares of our common stock.

Copies of the Securities Purchase Agreement and convertible note in favor of KBM Worldwide, Inc. were filed as exhibits with the SEC.

Additional KBM Worldwide, Inc. Financing

On July 22, 2014, we executed a Securities Purchase Agreement with KBM Worldwide, Inc., whereby we issued a convertible promissory note dated July 22, 2014, to KBM Worldwide, Inc. bearing interest on the unpaid balance at the rate of eight percent, in the original principal amount of $27,500.

The note is convertible into shares of our common stock by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion. The term "Conversion Amount" means, with respect to any conversion of a note, the sum of (1) the principal amount of the note to be converted in such conversion plus (2) at KBM Worldwide, Inc.'s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in the note to the Conversion Date; provided, however, that Mind Solutions shall have the right to pay any or all interest in cash plus (3) at our option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at KBM Worldwide, Inc.'s option, any amounts owed to KBM Worldwide, Inc. under the note.

The conversion price (the "Conversion Price") shall be the Variable Conversion Price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by Mind Solutions relating to our securities or the securities of any subsidiary of Mind Solutions, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean 51 percent multiplied by the Market Price (as defined in the note). "Market Price" means the average of the lowest three Trading Prices (as defined below) for our common stock during the 30 Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. "Trading Price" means, for any security as of any date, the closing bid price on the Over-the-Counter Bulletin Board, Pink Sheets electronic quotation system or applicable trading market (the "OTC") as reported by a reliable reporting service ("Reporting Service") designated by the Holder (i.e. Bloomberg) or, if the OTC is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the "pink sheets." If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by Mind Solutions and the holders of a majority in interest of the note being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such note.

"Trading Day" shall mean any day on which shares of our common stock are tradable for any period on the OTC, or on the principal securities exchange or other securities market on which shares of our common stock are then being traded.

All shares of our common stock to be issued to KBM Worldwide, Inc. are to be issued free of any restrictions pursuant to Rule 144 under the Securities Act.

The note further provides for anti-dilution adjustments in favor of KBM Worldwide, Inc., in the event we offer additional shares of our common stock.

As of the date of this report, $27,500 of the note remains unpaid. There have been no conversions of the note.

Copies of the Securities Purchase Agreement and convertible note in favor of KBM Worldwide, Inc. were filed as exhibits with the SEC.

WHC Capital, LLC Financing

On May 30, 2014, we executed a Securities Purchase Agreement and convertible promissory note in the amount of $60,000 with WHC Capital, LLC with 12 percent interest per annum, due May 30, 2015. The note holder has the right to convert the note into shares of our common stock after six months from the date of the executed note at a discount to market of 50 percent based on the lowest trading price 10 days prior to conversion.

All shares of our common stock to be issued to WHC Capital, LLC upon conversion of the note will be free of any restrictions pursuant to Rule 144 under the Securities Act.

As of the date of this report, $60,000 of the WHC Capital, LLC note remains unpaid.

Copies of the Securities Purchase Agreement and convertible note in favor of WHC Capital, LLC are filed as exhibits to this report.

Iconic Holdings, LLC Financing

On February 18, 2014, we executed a Note Purchase Agreement with Iconic Holdings, LLC, whereby we issued a convertible promissory note dated February 18, 2014, to Iconic Holdings, LLC bearing interest on the unpaid balance at the rate of 10 percent, in the original principal amount of $220,000.

The initial Purchase Price was $27,500 of consideration upon execution of the Note Purchase Agreement and all supporting documentation. The sum of $25,000 was delivered to Mind Solutions, and $2,500 was retained by Iconic Holdings through an original issue discount for due diligence and legal bills related to this note.

Iconic reserves the right to pay additional consideration on the note at any time and in any amount it desires, at its sole discretion. Mind Solutions is not responsible to repay any unfunded portion of the note. The note may not be prepaid in whole or in part except as otherwise provided therein.

Conversion Right. Subject to the terms of the note, Iconic shall have the right, at Iconic's option, at any time to convert the outstanding principal amount and interest under the note in whole or in part.

Stock Certificates or DWAC. Mind Solutions will deliver to Iconic, or Iconic's authorized designee, no later than two Trading Days after the Conversion Date, a certificate or certificates (which certificate(s) shall be free of restrictive legends and trading restrictions) representing the number of shares of common stock being acquired upon the conversion of the note. In lieu of delivering physical certificates representing the shares of common stock issuable upon conversion of the note, provided Mind Solutions' transfer agent is participating in the DTC Fast Automated Securities Transfer ("FAST") program, upon request of Iconic, Mind Solutions shall use commercially reasonable efforts to cause its transfer agent to electronically transmit such shares issuable upon conversion to Iconic (or its designee), by crediting the account of Iconic's (or such designee's) prime broker with DTC through its Deposits and Withdrawal at Custodian (DWAC) program (provided that the same time periods herein as for stock certificates shall apply).

Reservation and Issuance of Underlying Securities. Mind Solutions covenants that it will at all times reserve and keep available out of its authorized and unissued common stock solely for the purpose of issuance upon conversion of the note (including repayments in stock), free from preemptive rights or any other actual contingent purchase rights of persons other than Iconic, not less than three times (3x) the number of shares of common stock as shall be issuable (taking into account the adjustments under the note but without regard to any ownership limitations contained therein) upon the conversion of the note into common stock. These shares shall be reserved in proportion with the Consideration actually received by Mind Solutions and the total reserve will be increased with future payments of consideration by Iconic. Mind Solutions covenants that all shares of common stock that shall be issuable will, upon issue, be duly authorized, validly issued, fully-paid, non-assessable and freely-tradable. Mind Solutions agrees that this is a material term of the note.

Conversion Limitation. Iconic will not submit a conversion to Mind Solutions that would result in Iconic owning more than 9.99% of the total outstanding shares of Mind Solutions.

As of the date of this report, $25,000 of the note remains unpaid. There have been no conversions of the note.

Copies of the Note Purchase Agreement and convertible note in favor of Iconic Holdings, LLC were filed as exhibits with the SEC.

Seasonality

We do not anticipate that our business will be affected by seasonal factors. The only expected impact would be increased retail sales of our software applications during the Christmas season.

Impact of Inflation

General inflation in the economy has driven the operating expenses of many businesses higher. We will continuously seek methods of reducing costs and streamlining operations while maximizing efficiency through improved internal operating procedures and controls. While we are subject to inflation as described above, our management believes that inflation currently does not have a material effect on our operating results. However, inflation may become a factor in the future.

Critical Accounting Policies

Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. Critical accounting policies include revenue recognition and impairment of long-lived assets.

We recognize revenue in accordance with Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements." Sales are recorded when products are shipped to customers. Provisions for discounts and rebates to customers, estimated returns and allowances and other adjustments are provided for in the same period the related sales are recorded.

We evaluate our long-lived assets for financial impairment on a regular basis in accordance with Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" which evaluates the recoverability of long-lived assets not held for sale by measuring the carrying amount of the assets against the estimated discounted future cash flows associated with them. At the time such evaluations indicate that the future discounted cash flows of certain long-lived assets are not sufficient to recover the carrying value of such assets, the assets are adjusted to their fair values.


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Edgar Glimpses


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters