Secured Promissory Notes

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

Secured Promissory Notes

NOTE 4 - SECURED PROMISSORY NOTES

SECURED PROMISSORY NOTES -RELATED PARTY

Related Party notes payable consists of the following at periods ended:

	As of June 30, 2017		As of December 31, 2016
Secured Demand Promissory Note (provided by a related party) bearing interest of 4% per annum.	$	1,832,576	$	1,695,926
Secured Demand Promissory Note (provided by a related party) bearing interest of 12% per annum.		569,875		567,402
Secured Promissory Notes (provided by a related party -$1,000,000 in November 19, 2014) bearing interest of 12% per annum compounded annually, together with a five-year warrant to purchase up to one million shares of the Company’s common stock at an exercise price of $0.12 per share, and payable upon maturity in 2019 and secured by a security interest in substantially all of the assets of the Company and its subsidiaries.		1,329,543		1,248,894
Secured Promissory Notes (provided by a related party - $1,000,000 in August 29, 2013 and $2,000,000 in September 31, 2014) bearing interest of 12% per annum compounded annually, together with a five-year warrant to purchase up to three million shares of the Company’s common stock at an exercise price of $0.54 per share and payable upon maturity in 2018 and secured by a security interest in substantially all of the assets of the Company and its subsidiaries.		4,385,684		4,041,737
Total		8,117,678		7,553,959
Less: current portion		2,402,451		2,263,328
Secured promissory notes – related party	$	5,715,227	$	5,290,631

Continuity of Secured Promissory Notes – Related Party	As of June 30, 2017			As of December 31, 2016
Face value of November 19, 2014 secured note payable	$	1,000,000		$	1,000,000
Face value of August 29, 2013 secured note payable		1,000,000			1,000,000
Face value of September 30, 2013 secured note payable		2,000,000			2,000,000
Total face value of promissory notes payable		4,000,000			4,000,000
Discount on November 19, 2014 secured notes payable (1,000,000 warrants)		(58,082	)		(58,082	)
Discount on August 29, 2013 secured note payable (1,000,000 warrants)		(310,200	)		(310,200	)
Discount on September 30, 2013 secured note payable (2,000,000 warrants)		(600,400	)		(600,400	)
Accretion of discount on secured notes payable ($4,000,000 secured note payable)		721,612			624,744
Interest on secured notes payable ($4,000,000 secured note payable)		1,962,297			1,634,570
Carrying value of Secured Promissory Notes	$	5,715,227		$	5,290,631

The following annual payments of principal and interest are required over the next five years in respect to these related party secured notes payables:

Years Ending December 31,	Annual Payments
2017	$	2,402,451
2018		4,385,684
2019		1,329,543
2020		-
2021		-
Total	$	8,117,678

SECURED PROMISSORY NOTES

Secured notes payable consists of the following at periods ended:

	As of June 30, 2017		As of December 31, 2016
Secured Promissory Note -$100,000 in August 10, 2016 bearing interest of 12% per annum compounded annually, together with a five-year warrant to purchase up to one hundred thousand shares of the Company’s common stock at an exercise price of $0.12 per share, and payable upon maturity in 2021 and secured by a security interest in substantially all of the assets of the Company and its subsidiaries.		109,078		102,838
Secured Promissory Note -$100,000 in August 24, 2016 bearing interest of 12% per annum compounded annually, together with a five-year warrant to purchase up to one hundred thousand shares of the Company’s common stock at an exercise price of $0.12 per share, and payable upon maturity in 2021 and secured by a security interest in substantially all of the assets of the Company and its subsidiaries.		108,582		102,368
Secured Promissory Note -$400,000 in October 18, 2016 bearing interest of 12% per annum compounded annually, together with a five-year warrant to purchase up to four hundred thousand shares of the Company’s common stock at an exercise price of $0.12 per share, and payable upon maturity in 2021 and secured by a security interest in substantially all of the assets of the Company and its subsidiaries.		416,339		389,847
Total		633,999		595,053
Less: current portion		-		-
Secured promissory notes	$	633,999	$	595,053

Continuity of Secured Promissory Notes		As of June 30, 2017			As of December 31, 2016
Face value of August 10, 2016 secured note payable	$	100,000		$	100,000
Face value of August 25, 2016 secured note payable		100,000			100,000
Face value of October 18, 2016 secured note payable		400,000			400,000
Total face value of promissory notes payable		600,000			600,000
Discount on August 10, 2016 secured notes payable ( 100,000 warrants)		(2,000	)		(2,000	)
Discount on August 24, 2016 secured notes payable ( 100,000 warrants)		(2,000	)		(2,000	)
Discount on October 18, 2016 secured notes payable ( 400,000 warrants)		(20,000	)		(20,000	)
Accretion of discount on secured notes payable ($600,000 secured note payable)		3,333			533
Interest on secured notes payable($600,000 secured note payable)		54,666			18,520
Carrying value of Secured Promissory Notes	$	633,999		$	595,053

The following annual payments of principal and interest are required over the next five years in respect to these secured notes payable:

Years Ending December 31,	Annual Payments
2017	$	-
2018		-
2019		-
2020		-
2021		633,999
Total	$	633,999