| Note 9. NOTES PAYABLE |
Notes payable are as
follows:
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September 30, |
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December 31, |
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2016 |
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2015 |
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| Promissory note dated July 25, 2014 issued to an accredited investor, which matured July 24, 2015 and bore interest at a rate of 12% per annum. The holder of the note extended the maturity to July 25, 2017. Principal and interest may be converted into common stock based on the average trading price of the ten days prior to maturity at the holders option. |
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$ |
150,000 |
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|
$ |
150,000 |
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| Unsecured promissory demand notes issued to an accredited investor, which bears interest at a rate of 4% per annum. Holder may elect to convert into common stock at $0.75 per share. In 2015, the investor exchanged the notes from other accredited investors. |
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|
114,306 |
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|
114,306 |
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| |
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| 5% Original issue discount senior secured convertible promissory note dated May 5, 2014 issued to accredited investors, which matured November 5, 2015, and bore interest at a rate of 12% per annum. The fixed conversion price in effect was set at 90% of the 20-day volume weighted average price (VWAP) of our common stock on February 5, 2014, or $0.30753 per share. In 2015, the holder of the note converted some of the debt and accrued interest into common stock. The remaining balance of the note and accrued interest was converted into common stock in March 2016. |
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|
- |
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|
96,491 |
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| |
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| Convertible promissory note dated April 7, 2015 issued to accredited investors, which matures October 7, 2016 and bears interest at a rate of 12% per annum. The conversion price in effect is $0.1303, subject to adjustment. The remaining balance of the note and accrued interest was converted into common stock in January 2016. |
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|
- |
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|
170,856 |
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| |
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| Convertible promissory note dated May 13, 2015 issued to accredited investors, which matures November 13, 2016 and bears interest at a rate of 12% per annum. The conversion price in effect is $0.1211, subject to adjustment. The remaining balance of the note and accrued interest was converted into common stock in January 2016. |
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|
- |
|
|
|
170,783 |
|
| |
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| Convertible promissory note dated December 14, 2015, issued to accredited investors, which matures December 13, 2016 and bears interest at a rate of 12% per annum. The conversion price in effect is $0.1211, subject to adjustment. |
|
|
439,381 |
|
|
|
214,927 |
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| |
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| Convertible promissory note dated March 10, 2016, issued to accredited investors, which matures September 10, 2017 and bears interest at a rate of 1% per annum. The conversion price in effect is 90% of the average of the lowest three (3) VWAPs for the five (5) consecutive trading days prior to the conversion date. |
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|
1,250,000 |
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|
- |
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| Convertible promissory note dated May 27, 2016, and amended on July 25, 2016 issued to accredited investors, which matures May 27, 2018 and bears interest at a rate of 12% per annum. The conversion price in effect is $0.35, subject to adjustment. |
|
|
699,341 |
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|
- |
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| Convertible promissory note dated July 25, 2016, issued to accredited investors, which matures July 25, 2018 and bears interest at a rate of 12% per annum. The conversion price in effect is $0.35, subject to adjustment. |
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84,185 |
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|
- |
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| Convertible promissory note dated August 12, 2016, issued to accredited investors, which matures August 12, 2018 and bears interest at a rate of 12% per annum. The conversion price in effect is $0.35, subject to adjustment. |
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|
39,137 |
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|
- |
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| Convertible promissory note dated September 1, 2016, issued to accredited investors, which matures September 1, 2018 and bears interest at a rate of 12% per annum. The conversion price in effect is $0.35, subject to adjustment. |
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13,292 |
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- |
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| Total Debt |
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|
2,789,642 |
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|
917,363 |
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| Less short-term portion |
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1,953,687 |
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917,363 |
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| Long-term portion |
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$ |
835,955 |
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$ |
0 |
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Total debt as of September
30, 2016 and December 31, 2015, was $2,789,642 and $917,363, respectively, which included unamortized debt discount of $4,474,664
and $693,435, respectively. The senior secured promissory notes are secured by shares of common stock. There was accrued interest
of $91,527 as of September 30, 2016.
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