Quarterly report pursuant to Section 13 or 15(d)

NOTES PAYABLE RELATED PARTY

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NOTES PAYABLE RELATED PARTY
6 Months Ended
Jun. 30, 2015
Notes to Financial Statements  
Note 11 - NOTES PAYABLE-RELATED PARTY

As of June 30, 2015 and December 31, 2014, the Company received advances from Jorge Andrade, director, Scott Carley, and Neil Muller, President as loans from related parties. The loans are payable on demand and without interest. 

 

On January 22, 2013, the Company issued a unsecured promissory note payable for $200,000 due January 1, 2018, with a stated interest rate of 12% per annum beginning three months from issuance; payable monthly. Principal payments are due starting February 1, 2015 at $6,650 per month. The lender has an option to convert the note to licensing rights for the State of Oregon. The Company currently is in default of the required interest payments initially due starting April 22, 2013. During the year ended December 31, 2014, the Company has paid $36,390 principal and accrued interest towards the promissory note. 

 

In connection with the issuance of the above described promissory note, the Company issued 950,000 (as amended) of its common stock on March 31, 2014. 

  

The Company recorded a debt discount of $11,250 based on the fair value of the Company’s common stock at the issuance date of the promissory note. The discount is amortized ratably over the term on the notes. The note holder subsequently became an officer of the Company. The balance outstanding as of June 30, 2015 is $163,610 with unamortized debt discount of $4,256.