NOTES PAYABLE AND NOTES PAYABLE - RELATED PARTIES | NOTE 7 – NOTES PAYABLE AND NOTES PAYABLE - RELATED PARTIES At June 30, 2017 and December 31, 2016, notes payable consisted of the following: June 30, 2017 December 31, 2016 Notes payable $ 328,783 $ 336,283 Notes payable, convertible 25,000 25,000 Notes payable, related parties, convertible 1,824,633 1,824,633 Total $ 2,178,416 $ 2,185,916 NOTES PAYABLE Notes payable consisted of the following: June 30, 2017 December 31, 2016 Note payable to a former shareholder, past due as of January 2012, together with accrued interest at 5% APR and interest on overdue principal accruing at 10% APR. (a) $ 28,783 $ 28,783 Note payable to a shareholder, past due as of August 1, 2015, together with accrued interest at 10% APR. (b) 300,000 300,000 Note payable to a shareholder, payable upon demand, together with imputed interest only, as applicable. (c) — 7,500 Total $ 328,783 $ 336,283 As of June 30, 2017, the Company had outstanding a past due note payable (b) to a shareholder in the amount of $300,000. During the six months ended June 30, 2017, the Company paid note payable (c) to a shareholder in the amount of $7,500. At June 30, 2017, the Company was in arrears on an unsecured term note payable (a) to a former shareholder, and a separate unsecured term note payable (b) to a current shareholder. NOTES PAYABLE, CONVERTIBLE Notes payable, convertible consisted of the following: June 30, 2017 December 31, 2016 Note payable to an investor due as of January 20, 2018, together with accrued interest at 10% APR, and convertible at $0.01 per share of common stock. (a) $ 25,000 $ 25,000 Total $ 25,000 $ 25,000 NOTES PAYABLE, RELATED PARTIES, CONVERTIBLE Notes payable, related parties, convertible consisted of the following: June 30, 2017 December 31, 2016 Note payable to a company controlled by an outside director (also a shareholder), due on demand together with accrued interest at 4.5% APR, and convertible at $0.01 per share of common stock. (a) $ 60,000 $ 60,000 Note payable to the Company’s outside general counsel (also a shareholder), due on demand together with accrued interest at 4.5% APR, and convertible at $0.01 per share of common stock. (b) 150,000 150,000 Note payable to an outside director (also a shareholder), due on demand together with accrued interest at 4.5% APR, and convertible at $0.01 per share of common stock. (c) 30,000 30,000 Note payable to the Company’s outside general counsel (also a shareholder), due on demand together with accrued interest at 4.5% APR, and convertible at $0.007 per share of common stock. (d) 120,000 120,000 Note payable to the Company’s outside general counsel (also a shareholder), due on demand together with accrued interest at 12% APR, and convertible at $0.008 per share of common stock. (e) 10,000 10,000 Note payable to a related party investor (by virtue of shareholding percentage, both actual and on an as-converted basis), due November 13, 2018 together with accrued interest at 10% APR, and convertible at $0.01 per share of common stock. (f) 100,000 100,000 Note payable to a related party investor (by virtue of shareholding percentage, both actual and on an as-converted basis), due March 4, 2017 together with accrued interest at 10% APR, and convertible at $0.01 per share of common stock. (g) 50,000 50,000 Note payable to a related party investor (by virtue of shareholding percentage, both actual and on an as-converted basis), due March 18, 2019 together with accrued interest at 10% APR, and convertible at $0.01 per share of common stock. (h) 100,000 100,000 Note payable to a related party investor (by virtue of shareholding percentage, both actual and on an as-converted basis), due May 12, 2019 together with accrued interest at 10% APR, and convertible at $0.01 per share of common stock. (i) 50,000 50,000 Note payable to a related party investor (by virtue of shareholding percentage, both actual and on an as-converted basis), due June 7, 2019 together with accrued interest at 10% APR, and convertible at $0.01 per share of common stock. (j) 200,000 200,000 Note payable to a related party investor (by virtue of shareholding percentage, both actual and on an as-converted basis), due July 28, 2019 together with accrued interest at 10% APR, and convertible at $0.01 per share of common stock. (k) 300,000 300,000 Note payable to an outside director (also a shareholder), due on demand together with accrued interest at 4.5% APR, and convertible at $0.007 per share of common stock. (l) 55,500 55,500 Note payable to an outside director (also a shareholder), due on demand together with accrued interest at 4.5% APR, and convertible at $0.007 per share of common stock. (m) 20,500 20,500 Note payable to the Company’s president and chief executive officer (also a shareholder), due on demand together with accrued interest at 4.5% APR, and convertible at $0.007 per share of common stock. (n) 349,329 349,329 Note payable to the Company’s controller who is also a shareholder, which note is due on demand together with interest at 4.5% APR, and convertible at $0.007 per share of common stock. (o) 134,604 134,604 Note payable to the Company’s vice president of research and development (also a shareholder), due on demand together with accrued interest at 4.5% APR, and convertible at $0.007 per share of common stock. (p) 49,000 49,000 Note payable to an independent contractor (also a shareholder), which note payable is due on demand together with interest at 4.5% APR, and convertible at $0.007 per share of common stock. (q) 25,700 25,700 Note payable in the name of a son of an outside director (also a shareholder), due on demand together with accrued interest at 4.5% APR, and convertible at $0.005 per share of common stock. (r) 20,000 20,000 Total $ 1,824,633 $ 1,824,633 Notes (a), (c), (l) and (r) reflect amounts due to a single outside director of the Company, who is also a shareholder, based on such director having (i) made certain vendor obligation payments directly on behalf of and for the benefit of the Company, (ii) having advanced certain funds to the Company at various dates for general working capital purposes, and (iii) having accrued director’s fees earned through September 15, 2016. In addition, the Company has recorded accounts payable, related parties, in the amount of $12,366 to the holder of notes (a), (c), (l) and (r). Notes (b) and (d) reflect payment obligations owed to the Company’s outside general counsel for legal services incurred by the Company for the years ended December 31, 2015 and 2014. Note (e) reflects a convertible debt investment made by the Company’s outside general counsel to the Company. Notes (f), (g), (h), (i), (j) and (k) reflect amounts due to a certain related party investor and significant shareholder for convertible debt investments made from time to time as indicated. Note (m) reflects amounts due to an outside director, who is also a shareholder, for accrued director’s fees earned through September 15, 2016. Note (n) reflects amounts due to the Company’s president and chief executive officer, who is also a shareholder, for previously accrued base salary. Note (o) reflects amounts due to the Company’s controller, who is also a shareholder, for previously accrued base salary. Note (p) reflects amounts due to the Company’s vice president of research and development, who is also a shareholder, for previously accrued wages. Note (q) reflects amounts due to an independent contractor who was President of one of EcoSmart’s divisions prior to the merger with EcoSmart and a current shareholder of the Company, for past earnings. See Note 10. For the six months ended June 30, 2017, the Company did not receive any proceeds from the issuance of new convertible notes payable. For the year ended December 31, 2016, the Company received proceeds from the issuance of convertible notes payable in the amount of $45,000 and an additional $700,000 from the issuance of convertible notes payable to related parties (total $745,000). At June 30, 2017, the Company was in arrears on the convertible note payable (g) to a related party investor. |