Notes Payable | 9 Months Ended |
Sep. 30, 2013 |
Notes Payable [Abstract] | ' |
Notes Payable | ' |
8. Notes Payable |
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Our notes payable consisted of the following at: |
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| 30-Sep-13 | December 31, 2012 |
Short-term note payable with interest at 12% per annum, | $ 10,000 | $ 10,000 |
currently in default |
Short-term note payable with interest at 18% per annum, | 5,000 | 5,000 |
due on demand |
Convertible note payable with interest at 18% per annum, | 50,000 | 50,000 |
convertible into shares of common stock at a price of |
$0.70 per share, currently in default |
Convertible note payable with interest at 8% per annum, | 5,000 | 5,000 |
convertible along with accrued interest into shares of |
common stock at a price equal to 50% of the market price |
on the date of conversion, currently in default |
Convertible note payable with interest at 8% per annum, | 65,000 | 65,000 |
convertible into shares of common stock at a price equal |
to $0.02 per share, currently in default |
Convertible note payable to an institutional investor, dated | - | 53,000 |
October 16, 2012, converted in full to common stock in |
the current year |
Convertible note payable to an institutional investor, dated | - | 37,500 |
November 29, 2012, converted in full to common stock in |
the current year |
Other short-term notes payable with interest ranging from | 7,500 | 7,500 |
12% to 18% per annum |
Beneficial conversion factor on convertible note payable | 5,991 | 5,000 |
Discount on convertible notes payable to institutional | - | -70,691 |
investor |
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| $ 148,491 | $ 167,309 |
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We had three convertible notes payable to an institutional investor: $53,000 dated October 22, 2012; $37,500 dated November 29, 2012; and $47,500 dated February 5, 2013. During the nine months ended September 30, 2013, each of these convertible notes payable was converted in full into shares of our common stock. For each of these convertible notes payable, we recorded debt issuance costs, a debt discount related to the estimated value of the derivative for the conversion feature of the note, and a derivative liability at the inception of the note. We amortized the debt discount to interest expense over the life of each respective note on a straight-line basis. The total discount on these convertible notes payable was $0 and $70,691 at September 30, 2013 and December 31, 2012, respectively. |
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We have recorded a liability for the beneficial conversion factor attributed to the $5,000 note payable which is convertible into shares of our common stock at a price equal to 50% of the market price, and recognized this amount as interest expense. The liability was $5,991 and $5,000 at September 30, 2013 and December 31, 2012, respectively. |
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At September 30, 2013 and December 31, 2012, interest payable on notes payable was $55,280 and $38,907, respectively. |