NOTES PAYABLE | NOTE 5. NOTES PAYABLE The following tables summarize notes payable as of June 30, 2017 and December 31, 2016: June 30, 2017 December 31, 2016 Notes payable, related parties $ 428,302 $ 358,802 Notes payable 300,000 150,000 Subtotal 728,302 508,802 Less debt discount (13,279 ) (20,549 ) Subtotal, net 715,023 488,253 Less current portion (715,023 ) (358,802 ) Net Long-Term Liabilities, net $ — $ 129,451 Original Issuance Maturity Interest Balance Balance Type Amount Date Date Rate 06/30/2017 12/31/2016 Notes Payable, Related Party $ 25,000 12/10/15 06/10/16 5.00 % $ — $ 8,000 Notes Payable, Related Party 7,500 03/11/16 09/11/16 5.00 % — — Notes Payable, Related Party 50,000 10/18/16 08/18/17 5.00 % 50,000 50,000 Notes Payable, Related Party 293,302 01/01/17 01/01/18 3.50 % 278,302 293,302 Notes Payable, Related Party 25,000 04/12/17 10/12/17 5.00 % 25,000 — Notes Payable, Related Party 25,000 04/27/17 04/27/18 3.00 % 25,000 — Notes Payable, Related Party 15,000 05/15/17 05/15/18 5.00 % 15,000 — Notes Payable, Related Party 10,000 06/12/17 06/12/18 3.00 % 10,000 — Notes Payable, Related Party 25,000 06/13/17 07/31/17 3.00 % 25,000 — Notes Payable 150,000 05/18/16 06/01/18 13.00 % 150,000 150,000 Notes Payable 25,000 05/08/17 07/08/17 0 % 25,000 — Notes Payable 125,000 05/15/17 08/31/17 10.00 % 125,000 — Subtotal 728,302 508,802 Debt Discount (13,279 ) (20,549 ) Total Notes Payable, Net $ 715,023 $ 488,253 Notes Payable On May 18, 2016, the Company entered into a loan agreement for $150,000 with an unrelated individual. The note is due on June 1, 2018. The note is secured by a mortgage or deed of trust on a property located in Fuquay Varina, North Carolina, owned by a minority shareholder, and by a personal guarantee of the President of the Company. The note bears an interest rate of 13% per annum and a default rate of 19% per annum. The Company paid an origination fee of 10% of the loan value and a broker’s commission of 3% of the loan value. There was also appraisal, underwriting, loan service, and attorney fees of approximately $9,500. The Company recorded a debt discount of approximately $29,079 resulting from these issuance costs which is being amortized over the life of the loan. As of June 30, 2017, the note has a remaining balance of $150,000 and a debt discount balance of $13,279. On May 8, 2017, the Company entered into a 2-month term promissory note with a non-related party for $25,000 to be used in operations. The note is secured by 50,000 shares of common stock as collateral and guarantees interest in the amount of $2,500 at the time of repayment. As of June 30, 2017, the note has a remaining balance of $25,000. On May 15, 2017, the Company entered into a 45-day promissory note with a related party for $125,000 to be used in operations. The note was extended on August 1, 2017 and is now due on August 31, 2017. The note is unsecured and bears an interest rate of 10% per annum. As of June 30, 2017, the note has a remaining balance of $125,000. Notes Payable – Related Parties On October 18, 2016, the Company entered into a promissory note with a related party for $50,000 to be used in operations. The note was extended on April 18, 2017 and is now due on August 18, 2017. The note is unsecured and bears an interest rate of 5% per annum. As of June 30, 2017, the note has a remaining balance of $50,000. On January 1, 2017, the Company consolidated its outstanding promissory notes with the Company’s President and CEO, into one promissory note totaling $293,302. The note is due January 1, 2018 and will accrue interest at 3.5% per annum. As of June 30, 2017, the note has a remaining balance of $278,302. On April 12, 2017, the Company entered into a 6-month term promissory note with a related party for $25,000 to be used in operations. The note is unsecured, is due on or before October 12, 2017, and bears an interest rate of 5% per annum. As of June 30, 2017, the note has a remaining balance of $25,000. On April 27, 2017 the Company entered into a one-year term promissory note with a related party for $25,000 to be used in operations. The note is unsecured and bears an interest rate of 3% per annum. As of June 30, 2017, the note has a remaining balance of $25,000. On May 15, 2017, the Company entered into a one-year term promissory note with a related party for $15,000 to be used in operations. The note is unsecured and bears interest at an interest rate of 5% per annum. As of June 30, 2017, the note has a remaining balance of $15,000. On June 12, 2017 the Company entered into a one-year term promissory note with a related party for $10,000 to be used in operations. The note is unsecured and bears an interest rate of 3% per annum. As of June 30, 2017, the note has a remaining balance of $10,000. On June 13, 2017, the Company entered into a short-term promissory note with a related party for $25,000 due on July 31, 2017, to be used in operations. The note is unsecured and bears an interest rate of 3% per annum. As of June 30, 2017 the note has a remaining balance of $25,000. |