Secured Promissory Notes

9 Months Ended

Sep. 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 September 30, 2017		As of December 31, 2016
Secured Demand Promissory Note (provided by a related party) bearing interest of 4% per annum.	$	1,948,995	$	1,695,926
Secured Demand Promissory Note (provided by a related party) bearing interest of 12% per annum.		579,163		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.		1,369,868		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.		4,559,343		4,041,737
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 million 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.		111,809		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 one million 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.		429,385		389,847
Total		8,998,563		8,046,174
Less: current portion		2,528,158		2,263,328
Secured promissory notes – related party	$	6,470,405	$	5,782,846

Continuity of Secured Promissory Notes – Related Party	As of September 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
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		4,500,000			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	)
Discount on August 24, 2016 secured notes payable (100,000 warrants)		(2,000	)		(2,000	)
Discount on October 18, 2016 secured notes payable (500,000 warrants)		(20,000	)		(20,000	)
Accretion of discount on secured notes payable ($4,000,000 secured note payable)		770,046			624,744
Accretion of discount on secured notes payable ($500,000 secured note payable)		4,100			800
Interest on secured notes payable ($4,000,000 secured note payable)		2,127,847			1,634,570
Interest on secured notes payable ($500,000 secured note payable)		59,094			13,814
Carrying value of Secured Promissory Notes	$	6,470,405		$	5,283,245

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

Years Ending December 31,	Annual Payments
2017	$	2,159,661
2018		3,000,000
2019		1,000,000
2020		-
2021		500,000
Total	$	8,998,563

SECURED PROMISSORY NOTES

Secured notes payable consists of the following at periods ended:

	As of September 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 million 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.		112,319			102,838
Total		112,319			102,838
Less: current portion		-			-
Secured promissory notes	$	112,319		$	102,838
Continuity of Secured Promissory Notes		As of September 30, 2017			As of December 31, 2016
Face value of August 10, 2016 secured note payable	$	100,000		$	100,000
Total face value of promissory notes payable		100,000			100,000
Discount on August 10, 2016 secured notes payable (100,000 warrants)		(2,000	)		(2,000	)
Accretion of discount on secured notes payable ($100,000 secured note payable)		433			133
Interest on secured notes payable($500,000 secured note payable)		13,886			4,705
Carrying value of Secured Promissory Notes	$	112,319		$	102,838

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

Years Ending December 31,	Annual Payments
2017	$	-
2018		-
2019		-
2020		-
2021		100,000
Total	$	100,000