Note 9 – Notes Payable

The notes payable consisted of the following as of January 31, 2016 and July 31, 2015:

Note Payable Consists of the Following at:
	January 31, 2016		July 31, 2015
Note payable (Auto)	$	-	$	61,397
Notes payable		277,159		50,000
		277,159		111,397
Less current portion		(277,159)		(65,688)
Long-term notes payable	$	-	$	45,709

The automobile note payable was secured by the Company’s automobile bearing interest at 3.99% per annum with a maturity date of October 9, 2019. The Company’s monthly payment under the automobile note was $1,336 until maturity. On December 11, 2015, the company returned the automobile back to the dealer and was released from the liability. Accordingly, the company wrote off the vehicle and note payable.

The company entered into two notes payable on May 12, 2015 and August 31, 2015 for a total principal of $50,000 and $40,000 respectively. The notes bear interest at 5% per month. The total principal balances together with accrued interest were due on January 7, 2016 and was now in default.

On October 5, 2015, the Company entered into a note with an investor for a total principal of $100,000. The principal and accrued interest balances are due in 48 payments of $2,625 each to be paid within 12 months. The note grants a continuing security interest in all of the Company’s business equipment, inventory, accounts receivable, general intangibles, intellectual property, licenses, assets and properties of any kind.

On October 9, 2015, the Company entered a business loan with a creditor for a total principal of $150,000. The principal and accrued interest balances are due in 220 payments of $900 each to be paid within 10 months. The note grants a continuing security interest in all of the Company’s business equipment, inventory, accounts receivable, general intangibles, intellectual property, licenses, assets and properties of any kind.

On November 17, 2015, the Company entered into a promissory note with an investor for a total principal of $10,000 that bears interest at 5% interest per year. The entire principal balance together with accrued interest was originally due on February 15, 2016 and is now in default.