Note 7. CONVERTIBLE NOTES PAYABLE | On June 15, 2012 the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $83,500 with an interest rate of 8% per annum that is due on March 9, 2013. The note was convertible by the holder after 180 days at 35% of the lowest trading price in the sixty trading days before the conversion. During the quarter ended December 31, 2013 Asher Enterprises issued notices of conversion to convert $20,600 on the June 2012 note for 132,010 shares at a price of $0.15 per share. The remaining balance of the note at December 31, 2013 was $6,350. An $87,148 loss on the conversion of the shares was recorded in 2013 as the note was in default and a derivative liability was no longer recorded at the time of conversions. During the three month period ended March 31, 2014 Asher Enterprises issued notices of conversion to convert the $6,350 remaining balance along with $3,340 in accrued interest on the this note to 92,286 shares at a price of $0.11 per share. The remaining balance of the note after the conversions was $-0-. An $84,610 loss on the conversion of the shares was recorded as the note was in default and a derivative liability was no longer recorded at the time of conversions. On August 12, 2012 the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $20,000 with an interest rate of 8% per annum due on August 3, 2013. The note was convertible by the holder after 180 days at 35% of the lowest trading price in the thirty trading days before the conversion. During the three month period ended March 31, 2014 Asher Enterprises issued notices of conversion to convert the entire $20,000 balance along with $1,600 in accrued interest on this note to 188,714 shares at a price of $0.10 per share. The remaining balance of the note after the conversions was $-0-. A $123,850 loss on the conversion of the shares was recorded as the note was in default and a derivative liability was no longer recorded at the time of conversions. On April 15, 2013 the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $53,000 with an interest rate of 8% per annum due on October 30, 2013. The note is convertible by the holder after 180 days at 40% of the lowest trading price in the thirty trading days before the conversion. During the three month period ended March 31, 2014 Asher Enterprises issued notices of conversion to convert the entire $53,000 balance along with $2,120 in accrued interest on this note to 459,333 shares at a price of $0.12 per share. The remaining balance of the note after the conversions was $-0-. A $259,903 loss on the conversion of the shares was recorded as the note was in default and a derivative liability was no longer recorded at the time of conversions. On April 15, 2013 the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $15,500 with an interest rate of 8% per annum due on November 15, 2013. The note is convertible by the holder after 180 days at 40% of the lowest trading price in the thirty trading days before the conversion. During the three month period ended March 31, 2014 Asher Enterprises issued notices of conversion to convert the entire $15,500 balance along with $620 in accrued interest on this note to 134,333 shares at a price of $0.12 per share. The remaining balance of the note after the conversions was $-0-. A $51,905 loss on the conversion of the shares was recorded as the note was in default and a derivative liability was no longer recorded at the time of conversions. On May 14, 2013 the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $32,500 with an interest rate of 8% per annum due on February 13, 2014. The note was convertible by the holder after 180 days at 45% of the lowest trading price in the thirty trading days before the conversion. During the three month period ended March 31, 2014 Asher Enterprises issued notices of conversion to convert the entire $32,500 balance along with $1,300 in accrued interest on this note to 250,370 shares at a price of $0.14 per share. The remaining balance of the note after the conversions was $-0-. A $111,209 decrease in derivative liability was recorded as a result of these conversions. On June 24, 2013 the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $7,500 with an interest rate of 8% per annum due on March 19, 2014. The note is convertible by the holder after 180 days at 45% of the lowest trading price in the thirty trading days before the conversion. During the three month period ended March 31, 2014 Asher Enterprises issued a notice of conversion to convert the entire $7,500 balance along with $300 in accrued interest on this note to 57,778 shares at a price of $0.14 per share. The remaining balance of the note after the conversions was $-0-. A $27,314 decrease in derivative liability was recorded as a result of these conversions. On September 19, 2013 the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $32,500 with an interest rate of 8% per annum due on June 12, 2014. The note is convertible by the holder after 180 days at 45% of the lowest trading price in the thirty trading days before the conversion. During the three month period ended March 31, 2014 Asher Enterprises issued a notice of conversion to convert $16,600 in principal on this note to 122,963 shares at a price of $0.14 per share. The remaining balance of the note after those conversions was $15,900. In April 2014, the remaining balance of this note was acquired by CareBourn Capital, which converted the entire remaining balance of $15,900 plus $1,378 in interest into 127,984 shares at a price of $0.14 per share. The remaining balance of this note after these conversions was $-0-. A $52,025 decrease in derivative liability was recorded as a result of these conversions. On August 21, 2012, the Company issued a convertible promissory note in the amount of $1,500 to the Gulfstream 1998 Irrevocable Trust. The note was unsecured, due on demand and carried interest at 8% per annum. The note was convertible into shares of common stock at the market price. During the year ended December 31, 2013 an additional $25,900 was loaned and $5,664 was repaid on these notes. In addition, $4,000 of these notes were converted to 4,000 shares of our Series B preferred stock At October 1, 2013 the remaining notes with a balance of $12,736 that was convertible at market price were amended making them convertible at 45% of the lowest trading price in the thirty trading days before the conversion creating a derivative liability. During that same period, 6,604 in principal on these notes were converted to 44,470 shares of common stock at a price of $0.15. A $14,013 decrease in the derivative liability on these notes was recorded for the converted shares. At December 31, 2013, there was $11,133 outstanding on convertible notes issued to the Gulfstream 1998 Irrevocable Trust. These notes are convertible at 45% of the lowest trading price in the thirty trading days before the conversion. During the year ended December 31, 2014 an additional $18,100 was loaned under the same conversion terms but are not convertible until six months following their issuance date. Also during that period a total of $9,166 was repaid on these notes. During the three month period ended March 31, 2014 the Trust issued a notice of conversion to convert $2,700 in principal on these notes to 20,000 shares at a price of $0.14 per share. A $14,013 decrease in derivative liability was recorded as a result of the conversion. The remaining balance of these notes was $17,367 at December 31, 2014 following these transactions. During the year ended December 31, 2015, a total of $2,500 was repaid on these notes and three notes totaling $13,100 were sold by the Trust to Codes Capital leaving a remaining balance on the notes of $1,767 at December 31, 2015. At October 1, 2013, an $18,000 unsecured demand promissory note with an interest rate of 8% convertible to common stock at market was outstanding. In October 2013, the conversion terms of this note were changed making it convertible at 45% of the lowest trading price in the thirty trading days before the conversion, creating a derivative liability. The entire principal balance of this note was outstanding at December 31, 2013. During the three month period ended March 31, 2014 the holder of this note issued notices of conversion to convert the entire $18,000 balance on this note plus $138 in accrued interest to 122,144 shares at a price of $0.14 per share. The remaining balance of the note after the conversions was $-0-. A $61,473 decrease in derivative liability was recorded as a result of these conversions. At October 1, 2013, the Company had an outstanding convertible promissory note to CareBourn Capital in the principal amount of $6,000 with an interest rate of 8% per annum due on December 19, 2013. The note was convertible by the holder at any time at 35% of the average of the three lowest trading prices in the ten trading days before the conversion. During the quarter ended December 31, 2013, CareBourn Capital converted $3,990 on this note for 26,590 shares at a price of $0.15 per share. A $45,495 loss on the conversion of the shares was recorded as the note was in default and a derivative liability was no longer recorded at the time of conversions. The remaining balance of the note after the conversions was $2,010 at December 31, 2013. During the quarter ended March 31, 2014, CareBourn Capital converted the $2,010 balance on this note plus $416 in accrued interest to 26,172 shares at a price of $0.15 per share. The remaining balance of the note after the conversions was $-0-. A $22,915 loss on the conversion of the shares was recorded as the note was in default and a derivative liability was no longer recorded at the time of conversions. On October 1, 2013, the Company issued a convertible promissory note to Cresthill Associates in the principal amount of $9,300 with an interest rate of 8% per annum due on June 1, 2014 upon the conversion of $9,300 in accounts payable to Cresthill. This note was convertible by the holder at any time at 45% of the lowest trading price in the ninety trading days before the conversion beginning six months from the issuance date. During the quarter ended March 31, 2014 this note was assigned to CareBourn Capital, which converted the entire note balance of $9,300 along with $145 in accrued interest into 89,949 shares of common stock at $0.15 per share. The remaining balance of this note was $-0- after this conversion and a loss on the conversion of $39,683 was recorded for the difference in the market value and the conversion price on the date of conversion. On October 29, 2013, the Company issued a convertible promissory note to Cresthill Associates in the principal amount of $25,000 with an interest rate of 8% per annum due on October 29, 2014 in payment of a $25,000 fee for work performed to complete the acquisition of the assets of Carmela's Pizzeria. This note is convertible by the holder at any time at 45% of the lowest trading price in the ninety trading days before the conversion beginning six months from the issue date. In the quarter ended December 31, 2014, $12,500 of this note was sold to Beaufort Capital the entire balance of which remained unpaid at both December 31, 2014 and 2015. In the quarter ended June 30, 2015, $6,250 of this note was sold to MM Visionary Consultants, which converted that entire balance to common stock in the quarter ended September 30, 2015 leaving a balance due to MM Visionary Consultants of $0 as of that date. A $31,388 decrease in derivative liability was recorded as a result of these conversions. During the quarter ended September 30, 2015, the remaining $6,250 of this note was sold to Microcap Equity leaving a remaining balance of $0 as of September 30, 2015 payable to Cresthill Associates. During the year ended December 31, 2015, Microcap equity converted $833 of this amount leaving a balance due at that date of $5,417 and a $4,183 decrease in derivative liability was recorded from this conversion. In November 2013, the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $22,500 with an interest rate of 8% per annum due on August 27, 2014. The note is convertible by the holder after 180 days at 45% of the lowest trading price in the thirty trading days before the conversion. In April 2014, this note was sold and assigned to two entities unaffiliated with Asher or the Company including $9,000 sold to CareBourn Capital and $13,500 sold to Incipix Partners. During the three month period ended September, 2014 Incipix Partners issued a notice of conversion to convert $13,500 in principal and $657 in interest on this note to 209,732 shares at a price of $0.07 per share. A $20,251 decrease in derivative liability was recorded as a result of this conversion. The remaining balance of the note after those conversions was $9,000 payable to CareBourn Capital at both December 31, 2015 and 2014. On December 9, 2013, the Company issued a convertible promissory note to CareBourn Capital in the principal amount of $5,000 with an interest rate of 8% per annum due on June 9, 2014. This note is convertible by the holder at any time at 50% of the average of the three lowest trading prices in the ten trading days before the conversion. During the quarter ended December 31, 2014, CareBourn sold this note to Booski Consulting, an unaffiliated third party, which converted $2,600 in principal on the note to 173,333 shares of common stock at $0.015 per share. A $5,013 decrease in derivative liability was recorded as a result of this conversion. The remaining balance of the note after those conversions was $2,400 at both December 31, 2015 and 2014. In December 2013, the Company issued two convertible promissory notes to Gulfstream 1998 Trust in the aggregate principal amount of $5,000 with an interest rate of 8% per annum due on demand. These notes were convertible by the holder at any time at 45% of the lowest trading price in the ninety trading days before the conversion. At December 31, 2013, these notes were fully outstanding. During the year ended December 31, 2014 these note were repaid leaving no balance due at December 31, 2014. In January 2014, the Company issued a total of $10,000 in convertible promissory notes to CareBourn Capital with an interest rate of 8% per annum due in July 2014. These notes are convertible by the holder at any time at 45% of the average of the three lowest trading prices in the ten trading days before the conversion. During the year ended December 31, 2014 the holder converted $5,000 in principal and $237 in interest on these notes to 158,768 shares at a price of $0.03 per share. An $11,072 decrease in derivative liability was recorded as a result of these conversions. The remaining balance of the note after conversions was $5,000 at both December 31, 2015 and 2014. On February 18, 2014, the Company issued $62,500 in a convertible promissory note to CareBourn Capital with an interest rate of 8% per annum due in August 2014. This note is convertible by the holder at any time at 50% of the average of the three lowest trading prices in the ten trading days before the conversion. During the year ended December 31, 2014 the holder converted $4,590 in principal on these notes leaving a balance due of $57,910 at December 31, 2014. An $8,900 decrease in derivative liability was recorded as a result of these conversions. The remaining balance of the note after conversions was $57,910 at December 31, 2014. During the year ended December 31, 2015, a total of $55,306 in principal on these notes was converted to 513,179,160 shares of common stock at a price equaling $.0001 per share. A $186,096 decrease in derivative liability was recorded as a result of these conversions. The principal balance due on this note was $2,604 as of December 31, 2015. On March 3, 2014, the Company issued a convertible promissory note to LG Funding in the principal amount of $35,000 with an interest rate of 8% per annum due on February 25, 2015. The note is convertible by the holder after 180 days at 50% of the lowest closing bid price in the ten trading days before the conversion. During the year ended December 31, 2014 the holder converted $16,200 in principal leaving a balance due of $18,800 as of December 31, 2014. During the year ended December 31, 2015, the entire $18,800 in remaining principal and $2,192 in accrued interest on these notes was converted to 126,923,611 shares of common stock at a price equaling $.0002 per share. A $62,323 decrease in derivative liability was recorded as a result of these conversions. The principal balance due on this note was $0 at December 31, 2015. On April 7, 2014, the Company issued a convertible promissory note to Adar Bays in the principal amount of $37,000 with an interest rate of 8% per annum due on April 1, 2015. The note is convertible by the holder after 180 days at 50% of the lowest closing bid price in the ten trading days before the conversion. During the year ended December 31, 2014 the holder converted $12,004 in principal on these notes leaving a balance due of $24,996 as of December 31, 2014. During the year ended December 31, 2015, a total of $4,543 in principal on these notes was converted to 7,772,000 shares of common stock at a price equaling $.0006 per share. A $39,645 decrease in derivative liability was recorded as a result of these conversions. The principal balance due on this note was $20,453 at December 31, 2015. On April 17, 2014, the Company issued a convertible promissory note to Beaufort Capital in the principal amount of $25,000 with an interest rate of 10% per annum due on October 17, 2014. The note is convertible by the holder after 180 days at 60% of the lowest closing bid price in the twenty trading days before the conversion. During the year ended December 31, 2014, $10,345 of these notes were converted leaving a balance due of $14,655 as of December 31, 2014 and December 31, 2015, respectively. On July 15, 2014, the Company issued a convertible promissory note to Gregory Galanis in the principal amount of $13,500 with an interest rate of 8% per annum due on April 15, 2015, in exchange for $13,500 in debt owed Mr. Galanis for services rendered to the Company. The note is convertible by the holder after 180 days at 45% of the lowest closing bid price in the ninety trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2014 and December 31, 2015, respectively. On September 1, 2014, the Company issued a convertible promissory note to Cresthill Associates in the principal amount of $12,500 with an interest rate of 8% per annum due on July 1, 2015, in exchange for $12,500 in debt owed Cresthill for services rendered to the Company. The note is convertible by the holder after 180 days at 45% of the lowest closing bid price in the thirty trading days before the conversion and the entire amount was outstanding at December 31, 2014. In the quarter ended September 30, 2015, the entire balance of this note was sold to Codes Capital, which converted a total of $1,763 in principal on these notes to 3,561,539 shares of common stock at a price equaling $.0005 per share. A $8,854 decrease in derivative liability was recorded as a result of these conversions. The principal balance due on this note was $10,737 at December 31, 2015. On October 9, 2014, the Company issued a convertible promissory note to LG Funding in the principal amount of $26,500 with an interest rate of 8% per annum due on October 9, 2015. The note is convertible by the holder after 180 days at 50% of the lowest closing bid price in the ten trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2014 and December 31, 2015, respectively. On November 3, 2014, the Company issued a convertible promissory note to Beaufort Capital in the principal amount of $12,500 due on May 3, 2015 with an interest rate of 5% per annum, which accrues only in the event of a default and only from such default date until the note is paid in full. The note is convertible by the holder after 180 days at 50% of the lowest closing bid price in the ten trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2014 and December 31, 2015, respectively. On February 9, 2015 the Company issued a convertible promissory note to CareBourn Capital in the principal amount of $73,000 due on December 27, 2015 with an interest rate of 12% per annum. The note is convertible by the holder after 180 days at 40% of the three lowest closing bid prices in the ten trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2015. On April 1, 2015, the Company issued a convertible promissory note to SoFran, LLC in the principal amount of $50,000 due on January 1, 2015 with an interest rate of 12% per annum. This note was issued as part of a consulting contract entered into with SoFran for services to be rendered in connection with the Company's plans to set up a national franchising program. In addition to this note, SoFran was paid $10,000 in April 2015 and is due an additional $5,000. Certain future payments totaling $35,000 may be due to SoFran under the contract upon them reaching certain performance benchmarks. The note is convertible by the holder after 180 days at 40% of the three lowest closing bid prices in the ten trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2015. On April 14, 2015, LG Capital Funding funded a convertible promissory note in the principal amount of $26,500 that was issued on October 9, 2014 and secured at that time by a note payable to the Company with like terms. This note is due on October 9, 2015 with an interest rate of 8% per annum. The note is convertible by the holder at 50% of the lowest closing bid price in the ten trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2015. On May 5, 2015 the Company issued a convertible promissory note to Cresthill Associates in the principal amount of $16,500 due on November 5, 2015 with an interest rate of 8% per annum, in exchange for amounts payable to Cresthill for services rendered. The note is convertible by the holder after 180 days at 45% of the lowest last sales price in the thirty trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2015. On May 27, 2015 the Company issued a convertible promissory note to CareBourn Capital in the principal amount of $10,500 due on February 27, 2016 with an interest rate of 12% per annum. Debt issuance costs of $3,000 were recorded for net proceeds to the Company of $7,500. The note is convertible by the holder after 180 days at 40% of the three lowest closing bid prices in the ninety trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2015. On August 5, 2015 the Company issued a convertible promissory note to Cresthill Associates in the principal amount of $7,500 due on February 5, 2016 with an interest rate of 8% per annum in exchange for amounts payable to Cresthill for services rendered. The note is convertible by the holder after 180 days at 45% of the lowest last sales price in the thirty trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2015. On July 20, 2015 the Company issued a convertible promissory note to CareBourn Capital in the principal amount of $15,500 due on April 20, 2016 with an interest rate of 12% per annum. Debt issuance costs of $3,000 were recorded for net proceeds to the Company of $12,500. The note is convertible by the holder after 180 days at 40% of the three lowest closing bid prices in the ninety trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2015. On July 31, 2015 the Company issued a convertible promissory note to Gulfstream 1998 Irrevocable Trust in the principal amount of $2,500 due on July 31, 2016 with an interest rate of 8% per annum. The note is convertible by the holder after 180 days at 45% of the lowest trading price in the thirty trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2015. On November 16, 2015 the Company issued a convertible promissory note to Cresthill Associates in the principal amount of $7,500 due on August 16, 2016 with an interest rate of 8% per annum in exchange for amounts payable to Cresthill for services rendered. The note is convertible by the holder after 180 days at 45% of the lowest last sales price in the thirty trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2015. Total interest expense on these notes was $32,258 and $16,002 for the years ended December 31, 2015 and 2014, respectively. A summary of debentures payable as of December 31, 2015 and 2014 is as follows: Face Value Balances 12/31/14 Issuance of new convertible notes Amortization of discount on convertible Notes Debenture conversions & payments year ended 12/31/15 Balances 12/31/15 Notes outstanding at 12/31/2014 $ 240,128 - - $ (89,995 ) $ 150,133 2015 note issuances - $ 209,600 - - 209,600 Note discount $ (18,134 ) (249,500 ) $ 227,285 - (40,349 ) Total $ 221,994 $ (39,900 ) $ 227,285 $ (89,995 ) $ 319,384 Face Value Balances 12/31/13 Issuance of new convertible notes Amortization of discount on convertible Notes Debenture conversions & payments year ended 12/31/14 Balances 12/31/14 Notes outstanding at 12/31/2013 $ 260,294 $ - $ - $ (224,627 ) $ 35,667 2014 note issuances - 252,600 - (48,139 ) 204,461 Note discount $ (55,423 ) (239,600 ) 276,889 - (18,134 ) Total $ 204,871 $ 13,000 $ 276,889 $ (272,766 ) $ 221,994 |