Related Party Transactions Disclosure

3 Months Ended

Mar. 31, 2015

Notes

Related Party Transactions Disclosure

4.           Convertible Notes Payable

On December 9, 2014 the Company executed two promissory notes payable to directors, Eric Jones and Jim Collard. The amount of the notes was $25,000 each for a total of $50,000, and identical in terms. The interest rate on these notes is 10% per month of the principal balance. The notes are due in full no later than July 1, 2015, and have a minimum amount due of 5 months of interest if the notes are paid back earlier. Interest expense recorded in connection with these notes was $18,530 during the quarter ended March 31, 2015.

The convertible notes contained a beneficial conversion feature of $13,492 which was recognized as a discount on the notes on the date of issuance. The discount was amortized over the note term using the straight-line method, which approximates the effective interest method. For the three months ended March 31, 2015, the Company recorded $5,782 in interest expense related to the amortization of the discount.