Note 10 - Notes Payable | Note 10 – Notes Payable A summary of notes payable as of December 31, 2015 and 2014 is as follows: Interest Maturity Balance Balance Creditor Rate Date 12/31/2015 12/31/14 Salt Lake City Corp (1) 3.25% 7/1/2015 $- $12,520 Alliance Laundry Services LLC (2) 7.99% 3/3/2019 8,532 10,681 American Express Merchant Funding (3) 12.00% 8/2/2016 - 225,558 American Express Merchant Funding (4) 12.00% 11/19/2017 261,806 - William and Nina Wolfson (5) 11.00% 2/27/2016 14,844 18,115 Salt Lake City Corp (6) 5.00% 9/1/2017 18,935 29,035 Total $304,117 $295,909 Less: Current Portion 152,089 181,762 Long-Term Portion $152,028 $114,147 A summary of capital leases payable as of December 31, 2015 and 2014 is as follows: Interest Maturity Balance Balance Creditor Rate Date 12/31/2015 12/31/14 Castleton Equipment Lease (7) 16.96% 4/23/2016 $5,929 $21,843 Imaging Concepts Copier Lease (8) 10.90% 2/25/2018 - 4,105 Time Payment Corp - equip lease (9) 17.75% 9/5/2016 4,110 8,698 Total $10,038 $34,646 Less: Current Portion 10,038 21,701 Long-Term Portion $- $12,945 A summary of convertible notes payable as of December 31, 2015 and 2014 is as follows: Interest Maturity Balance Balance Creditor Rate Date 12/31/2015 12/31/14 Southridge Partners (10) 2/28/2013 $- $75,000 Eastshore Enterprises (11) 8.00% 8/17/2014 35,000 35,000 LG Capital Funding, LLC (12) 8.00% 3/25/2016 14,983 - JMJ Financial (13) 12.00% 7/30/2017 38,500 - Total $88,483 $110,000 Less: Current Portion 49,983 110,000 Less: Current Portion of Debt Discount 5,889 Total Current Portion, net of discount 44,094 Long-Term Portion $38,500 $- Less: Long-Term Portion of Debt Discount 30,390 Total Long-Term Portion net of discount $8,110 A summary of the related party note payable as of December 31, 2015 and 2014 is as follows: Interest Maturity Balance Balance Creditor Rate Date 12/31/2015 12/31/14 Sack Lunch - note payable (14) 10.00% 4/15/2015 $27,250 $27,250 Richard Surber $25k note payable (15) 18.00% 3/12/2018 20,820 - Diversified Holdings X, Inc $10k note (16) 18.00% 5/6/2016 9,309 - Richard Surber $25k note payable (17) 20.00% 11/6/2017 25,000 25,000 Total $82,379 $52,250 Less: Current Portion 67,990 52,250 Long-Term Portion $14,389 $- (1) On June 18, 2010, Landis Salons, Inc. received a loan in the amount of $100,000 from the Division of Economic Development of Salt Lake City Corporation. The loan includes a 1% origination fee. Principal and interest payments are made monthly over a five year term commencing June 2010. The loan is secured by a $25,000 certificate deposit held in the name of Landis Salons, Inc. and is personally guaranteed by Richard Surber, CEO of Green. The certificate of deposit is collateral for the loan. As of December 31, 2015 the note has been paid in full. (2) On March 3, 2014, Landis Salons, Inc. entered into a loan agreement with Alliance Laundry Services LLC in the amount of $12,021 for the financing of professional laundry equipment. The note calls for 60 monthly payments of $244 commencing when the equipment is delivered for installment. In addition to corporate guarantees, Richard Surber, President, CEO, and Director of Landis is a personal guarantor and the note is secured by the equipment. (3) On July 31, 2014, the Company entered into a loan agreement with American Express Bank, FSB in the amount of $240,000. The note is a merchant account financing arrangement wherein Landis repays the loan at the rate of 23% of the American Express credit card sales receipts that are collected each month. In addition to the merchant account receivables, collateral for the loan includes all receivables, financial instruments, equipment assets, inventories, intangibles, deposits, and other assets as applicable. The loan requires a prepaid interest charge that is 12% ($28,800) of the $240,000 loan amount. These financing costs are being amortized monthly to interest expense during the two year term of the loan. The total amount due at the inception date is $268,800. As of December 31, 2015, the note has been paid in full. (4) On February 3, 2015, the Landis Salons II, Inc. entered into a loan agreement with American Express Bank, FSB in the amount of $74,000. The note is a merchant account financing arrangement wherein Landis repays the loan at the rate of 30% of the American Express credit card sales receipts that are collected each month. The loan requires a prepaid interest charge that is 12% ($8,880) of the $74,000 loan amount. These financing costs are being amortized monthly to interest expense during the two year term of the loan. The total amount due at the inception date is $82,880. As of December 31, 2015 the note has been paid in full. (5) On February 27, 2012, Green and Landis Experience Center, LLC issued an 11% note payable in the principal face amount of $50,000 to William and Nina Wolfson in exchange for a cash payment of the same amount. The note provides for monthly payments in the amount of $1,292 of principal and interest. In addition to the Company's guarantee to the note, Richard Surber has personally guaranteed the note. (6) On August 20, 2012, the Board of Directors of LEC approved that LEC enter into a loan agreement with Salt Lake City Corporation in the amount of $50,000. Pursuant to the board approval, a note in the amount of $50,000 was issued on August 21, 2012. The note bears interest at 5% per annum and requires 60 monthly installments of $944 commencing October 1, 2012. In addition to corporate guarantees and the personal guarantee by Richard Surber, President, CEO, and Director of LEC, a certificate of deposit is being held as collateral for the loan. (7) On April 23, 2012, Landis Salons, Inc. entered into a capital lease financing agreement in the principal amount of $53,230 with Castleton Capital Corporation. The lease agreement requires 48 monthly payments of principal and interest in the amount of $1,535. Interest is at the rate of 16.96% per year and the maturity date is April 23, 2016. Landis has the option to purchase the leased salon equipment at maturity for a $1 bargain purchase amount. The Company applied the guidance of ASC 840 in its determination of the lease being a capital lease. In addition to the Company's guarantee for the debt, Richard Surber is personal guarantor to the lease. (8) On February 25, 2013, Landis Salons, Inc. entered into a capital lease financing agreement in the principal amount of $5,911 with Imaging Concepts. The lease agreement requires 60 monthly payments of principal and interest in the amount of $128. Interest is at the rate of 10.9% per year and the maturity date is February 25, 2018. Landis has the option to purchase the leased salon equipment at maturity for a $1 bargain purchase amount. The Company applied the guidance of ASC 840 in its determination of the lease being a capital lease. In addition to the Company's guarantee for the debt, Richard Surber is a personal guarantor to the lease. As of December 31, 2015 the note has been paid in full. (9) On July 26, 2012, Landis Salons, Inc. entered into a capital lease financing agreement in the principal amount of $16,826 with Time Payment Corporation. The lease agreement requires 48 monthly payments of principal and interest in the amount of $485. Landis has the option to purchase the leased salon equipment at maturity for $2,178 or less. The Company applied the guidance of ASC 840 in its determination of the lease being a capital lease. In addition to the Company's guarantee for the debt, Richard Surber is personal guarantor to the lease. (10) On August 15, 2012, Green issued a $75,000 promissory convertible promissory note to Southridge Partners II, LP as a condition of Southridge entering into an Equity Purchase Agreement with the Company (see Note 11). The transaction has been handled as a private sale exempt from registration under Rule 506 of the Securities Act of 1933. The note bears no interest and matures on February 28, 2014 at which time a balloon payment of the entire principal amount is due. The holder of the note is entitled any time after the maturity date to convert the note into common stock of the Company at 70% of the average of the two lowest closing bid prices for the five day prior to the date of the conversion. The Company determined the note contained a beneficial conversion feature and therefore recorded a $32,143 debt discount. As of December 31, 2015 the note has been paid in full. (11) On August 17, 2012, Green issued a $35,000 convertible promissory note to Eastshore Enterprises, Inc. Green converted $15,000 of accounts payable to Eastshore to the note and also received $20,000 in cash for the loan. The transaction has been handled as a private sale exempt from registration under Rule 506 of the Securities Act of 1933. The note matures on August 17, 2014 and bear interest at a rate of 8% per annum. After one year from issuance, the holder can be convertible into Green's common shares at the conversion rate of 54% of the market price of the lowest price of Green's common shares during the ten-day period ending one trading day prior to the date of the conversion. As of December 31, 2015, none of the note had been converted into shares of common stock. (12) On March 25, 2015, Green issued a $34,000 Convertible Promissory Note to LG Capital Funding, LLC ("LGCF Note") that matures March 26, 2016. The LGCF Note bears interest at a rate of 8% per annum and can be convertible into Green's common shares, at the holder's option, at the conversion rate of 58% of the market price (a 42% discount) of an average of the three lowest trading price of Green's common shares during the eighteen-day period ending on the date of the conversion. Green analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815-15 "Derivatives and Hedging" and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to "reset" provisions in the event the Company subsequently issues common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than conversion price of these notes. If these provisions are triggered, the conversion price of the note will be reduced. The Company has determined that the conversion feature is not considered to be solely indexed to the Company's own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability. (13) On July 30, 2015, Green issued a $38,500 Convertible Promissory Note to JMJ. The JMJ Note can be convertible into Green's common shares, at the holder's option, at the conversion rate of 60% of the market price (a 40% discount) of an average of the three lowest trading price of Green's common shares during the eighteen-day period ending on the date of the conversion. Green analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815-15 "Derivatives and Hedging" and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to "reset" provisions in the event the Company subsequently issues common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than conversion price of these notes. If these provisions are triggered, the conversion price of the note will be reduced. The Company has determined that the conversion feature is not considered to be solely indexed to the Company's own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability. (14) On April 15, 2013, Green entered into a promissory note with its parent company, Sack Lunch Productions Inc., in the amount of $37,400 for cash advanced to Green. Interest on the note is 10% per annum, monthly payments are $1,726 and the note is due 24 months from signing. (15) On March 24, 2015, Landis Salons, Inc. entered into a promissory note with Richard Surber, President, CEO, and Director of Green, for the sum of $25,000 for funds loaned. The note bears interest at the rate of 18% per annum, with a term of five years and monthly payments of $806 and a demand feature by which the note can be called upon the demand of Mr. Surber. As security for the note, Landis Salons pledged all of its assets, stock in trade, inventory, furniture, fixtures, supplies, any intangible property and all tangible personal property of Landis Salons and all and any other assets to which Landis Salons holds title or claims ownership or that is hereafter acquired by Landis Salons, subject only to purchase money liens held by sellers or grantors. (16) On May 6, 2015 Landis salons Inc. entered into a promissory note with Diversified Holdings X Inc. for the sum of $$10,000. The interest rate on this loan is 18% per annum. There will be a lump sum payment made 12 months after the origination date. (17) On November 5, 2012, Landis Salons II, Inc. entered into a promissory note with Richard Surber, President, CEO, and Director of Green, for the sum of $25,000 for funds loaned. The note bears interest at the rate of 20% per annum, with a term of five years and monthly payments of $662 and a demand feature by which the note can be called upon the demand of Mr. Surber. As security for the note, Landis Salons II pledged all of its assets, stock in trade, inventory, furniture, fixtures, supplies, any intangible property and all tangible personal property of Landis Salons II and all and any other assets to which Landis Salons II holds title or claims ownership or that is hereafter acquired by Landis Salons II, subject only to purchase money liens held by sellers or grantors. |