Notes Payable | Note 7 Notes Payable Bermuda Lender Convertible Other Debt (defined below) Notes Notes Discount Total Outstanding, January 1, 2014 $ 4,000,000 $ 281,000 $ 1,473,500 $ (240,491) $ 5,514,009 Issuances 500,000 300,000 [1] - - 800,000 Exchanges for equity - (71,000) (203,000) - (274,000) Conversions to equity - (342,500) - - (342,500) Repayments (89,063) - (113,000) - (202,063) Recognition of debt discount - - - (347,170) [1] (347,170) Amortization of debt discount - - - 464,470 464,470 Recharacterization of accrued interest as principal - - 108,059 [3] - 108,059 Accretion of interest expense - 15,000 [2] - 9,934 [1] 24,934 Settlement of accreted interest - (7,500) [2] - - (7,500) Outstanding, December 31, 2014 $ 4,410,937 $ 175,000 [4] $ 1,265,559 $ (113,257) $ 5,738,239 Issuances 150,000 735,000 [1] 478,018 [1] - 1,363,018 Indebtedness satisfied via settlement - - (5,000) - (5,000) Exchanges to equity (4,410,937) (266,667) (877,873) - (5,555,477) Conversion to equity - (223,333) - - (223,333) Repayments - - (5,000) - (5,000) Recognition of debt discount - - - (469,557) [1] (469,557) Accretion of interest expense - - - 85,086 [1] 85,086 Amortization of debt discount - - - 339,443 339,443 Recharacterization of accrued interest as principal - - 44,379 [3] - 44,379 Outstanding, December 31, 2015 $ 150,000 $ 420,000 [4] $ 900,083 $ (158,285) $ 1,311,798 [1] During the years ended December 31, 2015 and 2014, notes with an aggregate principal amount of $ 538,018 30,000 450,015 25,000 88,003 5,000 75,000 65,000 [2] During the year ended December 31, 2014, pursuant to the terms of certain notes payable with maturity dates ranging from January 8, 2014 June 10, 2014 90,000 105,000 15,000 7,500 January 8, 2014 30,000 [3] During the years ended December 31, 2015 and 2014, in connection with the extension of certain notes payable, an aggregate of $ 44,379 108,059 [4] As of December 31, 2015 and 2014, convertible notes with an aggregate principal balance of $ 420,000 175,000 197,500 83,333 Bermuda Lender On May 8, 2014, Cayman borrowed an additional $ 500,000 15 89,063 On August 13, 2014, Cayman and the Bermuda Lender agreed to extend the maturity date of a $ 4,000,000 July 31, 2014 December 31, 2014 27,500 121,000 On December 31, 2014, Cayman and the Bermuda Lender agreed to further extend the maturity date of the $4,000,000 Bermuda Lender Note from December 31, 2014 June 30, 2015 22,500 99,000 On May 11, 2015, Cayman and the Bermuda Lender agreed to extend the maturity date of the $ 500,000 410,938 May 7, 2015 June 30, 2015 316,297 On May 27, 2015, the Company and the Bermuda Lender agreed to exchange the $500,000 Bermuda Lender Note and the $4,000,000 Bermuda Lender Note with an aggregate principal amount of $ 4,410,937 69,436 746,730 3,733,645 186,682 15.00 672,056 40,000 December 31, 2015 80,000 5,327 On October 9, 2015, the Company borrowed $ 150,000 150,000 10 March 9, 2016 239,182 15.00 4.00 98,739 As of December 31, 2015 and 2014, the Bermuda Lender is a related party as a result of the size of its ownership interest in the Company's common stock. Convertible Notes and Other Notes Issuances Between January 17, 2014 and May 2, 2014, the Company issued convertible notes with an aggregate principal amount of $ 175,000 170,000 30,000 25,000 5,000 145,000 12 The convertible notes were initially payable 3-12 months from the date of issuance 175,000 145,000 Between November 12, 2014 and December 2, 2014, the Company issued convertible notes in the aggregate principal amount of $ 125,000 10 41,667 41,667 41,666 (a) 60% of the fair value of the Company’s stock or (b) $1.00 per share. In the event that the Company elects to effect a conversion of a specific note during the five day period following the conversion, the holder of that note shall have the right to convert the remaining outstanding principal amount of the convertible note, together with accrued and unpaid interest thereon, into shares of the Company’s common stock at a conversion price equal to the conversion price in the Company-effected conversion During the year ended December 31, 2015, the Company issued convertible notes with an aggregate principal balance of $ 735,000 725,000 1 12 10,000 (a) a range of 55% to 65% of the fair value of the Company's common stock or (b) $2.00 or $3.00 per share depending on the note. In the event that the Company elects to convert a portion of the $272,500 of principal outstanding under the notes into common stock, the holder will have the right to convert the remaining principal into shares of common stock at the same conversion price. In connection with the issuance of the convertible notes, the Company issued five-year, immediately vested warrants to purchase an aggregate of 30,885 shares of common stock at exercise prices ranging from $5.00 to $10.00 per share. 90,018 During the year ended December 31, 2015, the Company issued other notes payable with an aggregate principal amount of $ 478,018 400,015 75,000 65,000 78,003 Conversions, Exchanges and Other During the year ended December 31, 2014, the Company elected to convert certain convertible notes with an aggregate principal balance of $ 225,000 13,565 60,138 2.80 5.60 During the year ended December 31, 2014, the holders of certain convertible notes elected to convert such convertible notes with an aggregate principal balance of $ 117,500 3,646 29,102 3.80 4.40 During the year ended December 31, 2014, the Company and certain lenders agreed to exchange certain convertible notes with an aggregate principal balance of $ 71,000 4,260 12,339 5,000 15.00 74,029 1,231 During the year ended December 31, 2014, the Company and certain lenders agreed to exchange certain other notes with an aggregate principal balance of $ 203,000 15,672 42,735 5,000 exercise price of $ 15.00 268,997 50,323 In connection with the extension of other notes during the year ended December 31, 2014, the Company issued five-year warrants to purchase an aggregate of 9,500 10.00 15.00 29,800 During the year ended December 31, 2015, the Company elected to convert certain convertible notes with an aggregate principal balance of $ 223,333 15,175 53,595 3.00 5.16 During the year ended December 31, 2015, the Company and certain lenders agreed to exchange certain convertible notes with an aggregate principal balance of $ 266,667 12,580 92,875 39,092 exercise price of $ 4.00 288,060 8,813 During the year ended December 31, 2015, the Company and certain lenders agreed to exchange certain other notes with an aggregate principal balance of $ 877,873 82,701 188,632 111,358 4.00 15.00 982,112 21,537 As of December 31, 2015, the Company reclassified principal in the aggregate amount of $ 302,001 7,999 11,011 During the year ended December 31, 2015, the Company extended certain other notes payable in the aggregate principal amount of $ 735,081 10,000 37,500 4.00 88,875 35,215 10.00 4.00 10,234 During the years ended December 31, 2015 and 2014, the Company repaid an aggregate principal balance of $ 5,000 113,000 During the years ended December 31, 2015 and 2014, the contingently adjustable conversion ratios associated with certain convertible notes were resolved. The Company estimated the intrinsic value of the embedded conversion options based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the convertible note. During the years ended December 31, 2015 and 2014 the Company recognized $ 87,788 92,370 As of December 31, 2015, the outstanding convertible notes have maturity dates ranging from January 2016 to June 2016 and predominantly bear interest at a rate of 10 As of December 31, 2015, the outstanding other notes have maturity dates ranging from past due to October 2016 and predominantly bear interest at a rate of 15 2.0 4.0 |