• Filing Date: 2014-04-14
  • Form Type: 10-K
  • Description: Annual report
v2.4.0.8
5. NOTES PAYABLE (Tables)
12 Months Ended
Dec. 31, 2013
Notes Payable Tables  
Schedule of notes payable - related parties
Related party Nature of relationship Terms of the agreement   Principal Amount     Accrued Interest  
Araldo A. Cossutta Mr. Cossutta is a member of the Board of Directors Secured by assets of the company and payable on October 12, 2012 with interest accrued at 5% per annum. The note accrues default interest at 18% per annum.   $ 75,000     $ 18,512  
                     

MAH Holding, LLC

 

MAH Holding, LLC has provided previous lines of credit to affiliates of WMT. Unsecured note with interest accrued at 10% per annum, due on demand.     40,620       10,743  
Total       $ 115,620     $ 29,255  

 

 

Related party Nature of relationship Terms of the agreement   Principal Amount     Accrued Interest  
Lutz, Investments LP Mr. Lutz is the CEO of the Company Convertible note payable due March 31, 2012.  The note is convertible into common stock at $0.19 per share.   $ 200,000     $ 14,115  
                     
Dr. Philip J. Rubinfeld Mr. Rubinfeld is a member of the Board of Directors Secured by assets of the company and payable on October 12, 2012 with interest accrued at 5% per annum. The note accrues default interest at 18% per annum.     100,000       7,609  
                     
Araldo A. Cossutta Mr. Cossutta is a member of the Board of Directors Secured by assets of the company and payable on October 12, 2012 with interest accrued at 5% per annum. The note accrues default interest at 18% per annum.     75,000       5,706  
                     

MAH Holding, LLC

 

MAH Holding, LLC has provided previous lines of credit to affiliates of WMT. Unsecured note with interest accrued at 10% per annum, due on demand.     40,620       6,624  
Total       $ 415,620     $ 34,054  

 

Schedule of notes payable
Note Payable Terms of the agreement   Principal Amount     Unamortized Discount     Principal Net of Discount     Accrued Interest  
March 4, 2011 Note Payable $223,500 note payable; (i) interest accrues at 13% per annum; (ii) maturity date of September 4, 2011; (iii) $20,000 fee due at maturity date with a $1,000 per day fee for each day the principal and interest is late.  This note is currently the subject of litigation  (see Note 12 "Legal Proceedings”)   $ 223,500       -     $ 223,500     $ 58,998  
                                   
Third Quarter 2012 Secured Subordinated Promissory Notes Seventeen notes (including the two with related parties mentioned above) in the original aggregate principal amount of $1,055,000; (i) 5% interest due on maturity date; (ii) maturity date of October 12, 2012; (iii) after the maturity date interest shall accrue at 18% per annum and the company shall pay to the note holders on a pro rata basis, an amount equal to twenty percent of the sales proceeds received by the Company and its subsidiary, WCI, from the sale of surgical powders, until such time as the note amounts have been paid in full.  As of March 31, 2014 three of these notes remain due, of which two are with unrelated parties, in the aggregate principal amount of $110,000.     35,000       -       35,000       9,013  
                                   
September 28, 2012 Promissory Note $51,300 note payable (i) interest accrues at 10% per annum; (ii) maturity date of December 31, 2012; (iii) default interest rate of 15% per annum.  As of March 31, 2014, $11,300 of this note is past due.     31,300       -       31,300       8,763  
                                   
Second Quarter 2012 Convertible Notes Two $25,000 notes; (i) issued on April 3 and April 23, respectively; (ii) convertible at $0.19 per share (the notes convert automatically into common stock upon a qualified financing transaction, the notes are not convertible at the holders’ option); (iii) interest accrues at 5% per annum; (iv) interest accrues at 9% per annum after the due dates of April 30 and June 30, 2012, respectively. On September 20, 2012, 222,420 shares of Common Stock were issued in conversion of the April 23 note. As of the date of this filing these notes and all related interest are paid in full.     5,000       -       5,000       4,340  
                                   
May 30,  2012 Convertible Note Note in the principal amount of up to $275,000 including an approximate original issue discount of 10% on each draw; (i) maturity date one year from the date of each draw (ii) convertible at the lesser of $0.19 or a 30% discount on the fair market value of the Company's common stock; (iv) one time interest charge of 5% will be applied if the note is not repaid within the first 90 days.  As of the date of this filing, this note at all related accrued interest has been paid in full.     39,900       (29,406 )     10,494       1,995  
                                   
July 16, 2013 Promissory Notes Two $45,000 notes; (i) issued July 16, 2013 as part of two settlement agreements; (ii) interest accrues at 8%; (iii) due April 14, 2014; (iv) convertible 180 days after the issue date at 80% of the fair market value of the Company’s common stock.  In the first quarter of 2014, the entire principal and accrued interest balance of these notes was converted into common stock.     90,000       -       90,000       3,629  
                                   
BMI Note #1 Note in the principal amount of $1,000,000 which accrues interest at 8% per annum.  The note is due October 10, 2014.  The note may be converted, at the option of BMI, into shares of the Company’s Series C Preferred Stock at a conversion price of $70.00 per share.     1,000,000       -       1,000,000       18,192  
                                   
Quest Capital Investors, LLC Furniture purchase agreement in the original amount of $11,700 with $300 payments due each month.     11,100       -       11,100       -  
                                   
BMI Note #2 Note payable which accrues interest at 8% per annum and allows the Company to drawdown, as needed, an aggregate of $2,000,000, subject to an agreed upon schedule.  The note is due October 15, 2014.  The note may be converted, at the option of BMI, into shares of the Company’s Series C Preferred Stock at a conversion price of $70.00 per share.     200,000       (21,431 )     178,569       2,652  
                                   
Total     $ 1,635,800     $ (50,837 )   $ 1,584,963     $ 107,582  

 

 

Note Payable Terms of the agreement   Principal Amount     Unamortized Discount     Principal Net of Discount     Accrued Interest  
March 4, 2011 Note Payable $223,500 note payable; (i) interest accrues at 13% per annum; (ii) maturity date of September 4, 2011; (iii) $20,000 fee due at maturity date with a $1,000 per day fee for each day the principal and interest is late.  This note is currently the subject of litigation  (see Note 12 "Legal Proceedings”)   $ 223,500       -     $ 223,500     $ 29,539  
                                   
Purchase Order Financing Agreement $50,000 note payable; (i) interest accrues at 10% per annum; (ii) proceeds used to purchase inventory; (iii) lender will be reimbursed $25 per gram as the inventory is sold.  As of March 31, 2012 the lender is due $8,775 of sales proceeds.     43,847       -       43,847       536  
                                   
Third Quarter 2012 Secured Subordinated Promissory Notes Seventeen notes (including two with related parties mentioned above) in the original aggregate principal amount of $1,055,000; (i) 5% interest due on maturity date; (ii) maturity date of October 12, 2012; (iii) after the maturity date interest shall accrue at 18% per annum and the company shall pay to the note holders on a pro rata basis, an amount equal to twenty percent of the sales proceeds received by the Company and its subsidiary, WCI, from the sale of surgical powders, until such time as the note amounts have been paid in full.  As of March 31, 2013 fifteen of these notes remain due, of which thirteen are with unrelated parties in the aggregate principal amount of $610,000.     860,000       -       860,000       65,149  
                                   
September 19, 2012 Promissory Note $20,000 note payable; (i) interest accrues at 10% per annum; (ii) maturity date of December 31, 2012; (iii) warrant to purchase 20,000 shares of common stock at an exercise price of $0.15 per share to be issued upon default.  As of December 31, 2012 this note was not paid and the 20,000 warrants were issued to the note holder.  As of March 31, 2013 the $20,000 balance is past due.     20,000       -       20,000       570  
                                   
September 28, 2012 Promissory Note $51,300 note payable (i) interest accrues at 10% per annum; (ii) maturity date of December 31, 2012; (iii) default interest rate of 15 per annum.  As of March 31, 2013 this note is past due.     51,300       -       51,300       1,357  
                                   
October 1, 2012 Promissory Note $75,000 note payable;  (i) interest accrues at 9% per annum; (ii) the principal is due and payable as follows: (a) $10,000 on October 31; and (b) $15,000 each on November 31, 2012 December 31, 2012 and January 31, 2013 and (c) $20,000 on February 28, 2013 the maturity date; (iii) the Company will issue to Lender five-year warrant to purchase a total of 225,000 shares of common Stock at a price of $0.15 per share. As of March 31, 2013, the $15,000 payment due in January has been paid, the due date of the final $20,000 payment has been extended, and the balance is unpaid.     35,000       -       35,000       186  
                                   
December 7, 2012 Promissory Note $75,000 note payable; (i) interest accrues at 10% per annum; (ii) the principal is due and payable as follows: (a) $10,000 each on January 15, 2013 and February 15, 2013; and (b) $15,000 on March 15, 2013 and (c) $20,000 each on April 15, 2013 and May 15, 2013 the maturity date; (iii) the Company will issue to Lender five-year warrant to purchase a total of 350,000 shares of common Stock at a price of $0.075 per share. As of March 31, 2013 $35,000 in principal has been paid leaving a balance of $40,000 due.     75,000       -       75,000       521  
                                   
December 11, 2012 Promissory Note $50,000 note payable;  (i) interest accrues at 9% per annum; (ii) the principal is due and payable as follows: (a) $5,000 each on February 11, 2013 and March 11, 2013; and (b) $10,000 on April 11, 2013 and May 11, 2013 and (c) $20,000 on June 11, 2013 the maturity date; (iii) the Company will issue to Lender five-year warrant to purchase a total of 225,00 shares of common Stock at a price of $0.09 per share. Additionally, the Company will issue warrants to purchase 375,000 common shares at $0.09 exercisable only upon an event of default. As of March 31, 2013 $10,000 in principal has been paid leaving a balance of $40,000 due.     50,000       -       50,000       263  
                                   
June 21, 2011 Note Convertible promissory note in the principal amount of $560,000; (i) interest accrues at 12% per annum; (ii) maturity date of June 21, 2015; (iii) upon closing the Company issued to the lender 100,000 shares of Common Stock valued at $60,000 and two warrants to purchase 250,000 shares of common stock each, with exercise prices of $0.50 $1.00; (iv) the debt is convertible at a 30% discount on the fair market value of the stock.  The Company measured the fair value of the warrants and the beneficial conversion feature of the note and recorded a discount against the principal of the note. (see  Note 4 "Other Significant Transaction - Forbearance Agreement")     200,000       -       200,000       -  
                                   
March 2012 Convertible Notes Three convertible notes in the principal amount of $25,000, $50,000 and $100,000 respectively; (i) issued between March 3 and March 22, 2012; (ii) convertible at $0.19 per share; (iii) interest accrues at 5% per annum; (iv)  interest accrues at 9% per annum after the due dates between March 31 and June 30, 2012. As of the date of this filing these notes are past due.     175,000       -       175,000       11,281  
                                   
Second Quarter 2012 Convertible Notes Two $25,000 notes; (i) issued on April 3 and April 23, respectively; (ii) convertible at $0.19 per share; (iii) interest accrues at 5% per annum; (iv) interest accrues at 9% per annum after the due dates of April 30 and June 30, 2012, respectively. On September 20, 2012, 222,420 shares of Common Stock were issued in conversion of the April 23 note. As of the date of this this filing the April 3 note is past due.     25,000       -       25,000       1,629  
                                   
May 30,  2012 Convertible Note Note in the principal amount of up to $275,000 including an approximate original issue discount of 10%; (i) maturity date one year from the effective date (ii) convertible at the lesser of $0.19 or a 30% discount on the fair market value of the Company's common stock; (iv) one time interest charge of 5% will be applied if the note is not repaid within the first 90 days.     73,645       (18,005 )     55,640       2,750  
                                   
Total     $ 1,832,292     $ (18,005 )   $ 1,814,287     $ 113,781