Note 6. Convertible Notes Payable

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

Note 6. Convertible Notes Payable

Convertible notes payable consist of the following as of September 30, 2014 and December 31, 2013:

	September 30, 2014			December 31, 2013
Convertible note payable, dated April 1, 2010, bearing interest at 10% per annum, matured on March 31, 2013 and convertible into shares of common stock at $0.01 per share. This note is in default.	$	12,493		$	11,598
Convertible note payable, dated May 15, 2010, bearing interest at 10% per annum, matured on March 31, 2013 and convertible into shares of common stock at $0.01 per share. This note is in default.		6,405			5,947
Convertible note payable, dated October 31, 2012, bearing interest at 10% per annum, matures on April 30, 2014 and convertible into shares of common stock at $0.02. This note is in default.		1,423			1,423
Convertible note payable, dated April 1, 2013, bearing interest at 10% per annum, matures on March 31, 2015 and convertible into shares of common stock at $0.01.		5,999			25,613
Convertible note payable, dated June 30, 2013, bearing interest at 10% per annum, matures on June 30, 2015 and convertible into shares of common stock at $0.01.		136,969			167,185
Convertible note payable, dated September 30, 2013, bearing interest at 10% per annum, matures on September 30, 2015 and convertible into shares of common stock at $0.01.		312,310			312,310
Convertible note payable, dated June 30, 2014, bearing interest at 10% per annum, matures on June 30, 2014 and convertible into shares of common stock at $0.01.		162,946			—
Total convertible notes payable	$	638,545		$	524,076
Less: current portion of convertible notes payable		(475,599	)		—
Less: discount on noncurrent convertible notes payable		(157,850	)		(442,118	)
Convertible notes payable, net of discount	$	5,096		$	81,958

Conversions

The holders of the $167,185 convertible note payable signed on June 30, 2013 elected to convert principal and interest as follows:

Date	Principal & Interest Converted		Common Stock Issued upon Conversion
January 27, 2014	$	20,000		6,667
January 30, 2014		20,000		6,667
September 26, 2014		170		17,000
September 26, 2014		170		17,000
Total	$	40,340		47,334

The unamortized discount related to this principal was $21,399. This amount was immediately amortized to interest expense. The converted principal and interest of $40,340 was recognized as in increase in stockholders’ equity as a result of this conversion. There was no gain or loss on the conversion, as it was effected in accordance with the terms of the convertible note payable.

The holders of the $96,463 convertible note payable signed on April 1, 2013 elected to convert principal and interest as follows:

Date	Principal & Interest Converted		Common Stock Issued upon Conversion
January 14, 2014		20,000		6,667
Total	$	20,000		6,667

The unamortized discount related to this principal was $10,450. This amount was immediately amortized to interest expense. The converted principal and interest of $20,000 was recognized as in increase in stockholders’ equity as a result of this conversion. There was no gain or loss on the conversion, as it was effected in accordance with the terms of the convertible note payable.