| Convertible Notes Payable |
As of December 31, 2016 and 2015, the Company
had the following convertible notes outstanding:
| |
|
December 31, 2016 |
|
|
December 31, 2015 |
|
| |
|
Principal
(net) |
|
|
Accrued
Interest |
|
|
Principal
(net) |
|
|
Accrued
Interest |
|
| July and August 2012 $1,060,000 Notes convertible into common stock at $4.60 per share, 12% interest, due December 2013 and January 2014 |
|
$ |
95,000 |
|
|
$ |
50,365 |
|
|
$ |
165,000 |
|
|
|
69,712 |
|
| January 2014 $50,000 Note convertible into common stock at a variable conversion price, 8% interest, due January 2015 |
|
|
- |
|
|
|
- |
|
|
|
50,000 |
|
|
|
7,682 |
|
| January 2014 $55,500 Note convertible into common stock at a variable conversion price, 10% interest, due October 2014 |
|
|
- |
|
|
|
- |
|
|
|
10,990 |
|
|
|
5,457 |
|
| February 2014 $46,080 Note convertible into common stock at a variable conversion price, 10% interest, due February 2015 |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,358 |
|
| February 2014 $27,800 Note convertible into common stock at a variable conversion price, 10% one-time interest, due February 2015 |
|
|
- |
|
|
|
- |
|
|
|
20,000 |
|
|
|
- |
|
| March 2014 $50,000 Note convertible into common stock at a variable conversion price, 10% interest, due March 2015 |
|
|
- |
|
|
|
- |
|
|
|
36,961 |
|
|
|
6,572 |
|
| March 2014 $165,000 Note convertible into common stock at a variable conversion price, 10% interest, due April 2015 |
|
|
- |
|
|
|
- |
|
|
|
61,301 |
|
|
|
24,109 |
|
| April 2014 $32,000 Note convertible into common stock at a variable conversion price, 10% interest, due April 2015 |
|
|
- |
|
|
|
- |
|
|
|
22,042 |
|
|
|
3,034 |
|
| April 2014 $46,080 Note convertible into common stock at a variable conversion price, 10% interest due April 2015 |
|
|
- |
|
|
|
- |
|
|
|
5,419 |
|
|
|
4,608 |
|
| May 2014 $55,000 Note convertible into common stock at a variable conversion price, 12% interest, due May 2015 |
|
|
- |
|
|
|
- |
|
|
|
25,000 |
|
|
|
1,836 |
|
| June 2014 $28,800 Note convertible into common stock at a variable conversion price, 10% interest due June 2015 |
|
|
- |
|
|
|
- |
|
|
|
28,800 |
|
|
|
2,880 |
|
| June 2014 $40,000 Note convertible into common stock at a variable conversion price, 10% interest, due June 2015 |
|
|
- |
|
|
|
- |
|
|
|
40,000 |
|
|
|
6,049 |
|
| June 2014 $40,000 Note convertible into common stock at a variable conversion price, 10% interest, due June 2015 |
|
|
- |
|
|
|
- |
|
|
|
38,689 |
|
|
|
5,851 |
|
| June 2014 $56,092 Note convertible into common stock at a variable conversion price, 16% interest, due July 2015 |
|
|
- |
|
|
|
- |
|
|
|
56,092 |
|
|
|
13,462 |
|
| July 2014 $37,500 Note convertible into common stock at a variable conversion price, 12% interest, due July 2015 |
|
|
- |
|
|
|
- |
|
|
|
37,015 |
|
|
|
6,377 |
|
| August 2014 $36,750 Note convertible into common stock at a variable conversion price, 10% interest, due April 2015 |
|
|
- |
|
|
|
- |
|
|
|
36,750 |
|
|
|
5,538 |
|
| August 2014 $33,500 Note convertible into common stock at a variable conversion price, 4% interest, due February 2015 |
|
|
- |
|
|
|
- |
|
|
|
33,500 |
|
|
|
- |
|
| September 2014 $37,500 Note convertible into common stock at a variable conversion price, 12% interest, due September 2015 |
|
|
- |
|
|
|
- |
|
|
|
36,263 |
|
|
|
5,576 |
|
| May through October 2015 $605,000 Notes convertible into preferred stock at $1 per share, 8-10% interest, due September 30, 2015 |
|
|
- |
|
|
|
17,341 |
|
|
|
- |
|
|
|
18,264 |
|
| October through December 2015 $613,000 Notes convertible into preferred stock at $1 per share, 8% interest, due June 30, 2016, net of debt discount of $0 and $560,913, respectively |
|
|
- |
|
|
|
5,953 |
|
|
|
52,087 |
|
|
|
2,519 |
|
| January through March 2016 $345,000 Notes convertible into preferred stock at $1 per share, 8% interest, due June 30, 2016 |
|
|
- |
|
|
|
696 |
|
|
|
- |
|
|
|
- |
|
| November 2016 $979,162 Notes convertible into common stock at a variable conversion price, 10% interest, due May 2017, net of debt discounts of $540,720 and $0, respectively |
|
|
438,442 |
|
|
|
12,397 |
|
|
|
- |
|
|
|
- |
|
| Penalties on notes in default |
|
|
11,066 |
|
|
|
- |
|
|
|
1,032,475 |
|
|
|
- |
|
| Total Convertible Notes Payable, Net |
|
$ |
544,508 |
|
|
$ |
86,752 |
|
|
$ |
1,788,384 |
|
|
$ |
191,884 |
|
During the year ending December 31, 2016, the
Company received proceeds from new convertible notes of $1,273,534, obtained advances from shareholders of $127,533 that were reclassified
into convertible notes payable, and reclassified $455,150 of accrued interest into convertible notes payable. The Company recorded
original issue discounts and loan fees on new convertible notes of $193,831 and $6,000, respectively, which also increased the
debt discounts recorded on the convertible notes. The Company recorded $419,055 of payments on their convertible notes, conversions
of $1,444,950 of convertible note principal, a total gain on settlement of $1,456,113 representing the write-off of convertible
note principal, and $814,625 of debt discount write-offs for early debt conversion or extinguishment. Each of the Company’s
convertible notes have a conversion rate that is variable. The Company therefore has accounted for such conversion features as
derivative instruments (see Note 9). As a result of recording derivative liabilities at note inception, the Company increased the
debt discount recorded on their convertible notes by $809,835 during the year ending December 31, 2016. The Company also recorded
amortization of $579,042 on their convertible note debt discounts. Lastly, the Company issued 347,400 shares of Series A Preferred
as loan fees with their new convertible notes. The Company therefore increased their convertible note debt discount by $363,807,
which represented the portion of the convertible note proceeds that were allocated to preferred stock.
During the year ending December 31, 2015, the
Company received proceeds from new convertible notes of $1,285,000, recorded default penalties on new convertible notes of $116,521,
and recorded original issue discounts of $5,000, which also increased the debt discounts recorded on the convertible notes. The
Company recorded $255,000 of payments on their convertible notes conversions of $584,700 of convertible note principal, a total
loss on settlement of $967,038 representing the write-off of convertible note principal, and $3,035 of debt discount write-offs
for early debt conversion or extinguishment. Each of the Company’s convertible notes have a conversion rate that is variable.
The Company therefore has accounted for such conversion features as derivative instruments (see Note 9). As a result of recording
derivative liabilities at note inception, the Company has increased the debt discount recorded on their convertible notes by $1,285,000
during the year ending December 31, 2015. The Company also recorded amortization of $1,031,443 on their convertible note debt discounts.
|