Note 6 Notes and Loans Payable

3 Months Ended

Mar. 31, 2016

Note 6 Notes and Loans Payable

Notes and Loans Payable as of March 31, 2016 and December 31, 2015 consisted of the following:

Description	31-Mar-16		31-Dec-15
Note payable - Credit line, payable to Ascentium Capital, bearing interest at 24% per annum, unsecured, matures in February 2016	$	-	$	6,705
Note payable to Ascentium Capital, secured by truck, bearing interest at 9% per annum, matures in September, 2017*		8,151		9,341
Less current portion truck loan		-4,983		-4,048
Note payable – Orchard Street Funding – This loan was paid off in January, 2016		-		45,240
Note payable – other bearing interest at 12% per annum, unsecured, demand note.		60,762		59,832
Note payable to Web Bank, borrowed 2-1-16, bearing interest at 23% per annum, unsecured, matures in March, 2017*		130,907		-
Convertible note payable - EMA Financial, borrowed 3-16-16, due 3-16-17 with interest at 8% per annum - convertible into common stock		40,000		-
Convertible note payable - JMJ Financial, borrowed 3-23-16, due 3-23-18 with interest at 12% per annum - convertible into common stock		27,777		-
Original issue discounts and points on loans - less amortization of $1,768 for the quarter ended March 31, 2016		-21,009		-

Total notes payable		241,605		117,070
Long term debt - net of current portion		3,168		5,292
Total other notes and loans payable	$	238,437	$	111,778

Maturity of notes and loans payable

For the period Ending March 31,	Amount			Amount
2016		$	151,481		$	111,178
2017			62,347
2018			27,777
Total		$	241,605		$	111,178

*This debt is collateralized by the specific asset in the case of the truck loan and the WebBank loans is personally guaranteed by an officer of the Company.

On March 23, 2016, the Company issued a two year $250,000 convertible promissory note to JMJ Financial, a Nevada sole proprietorship which bears interest at the rate of 12% per annum on the principal sum of the outstanding (“JMJ Note”). The JMJ Note is payable in installments of a minimum of $25,000 per drawdown. The Company drew down $25,000 on March 23, 2016. Under the terms of the JMJ Note; the current balance is now $31,111, which includes an original issue interest of $2,777.00, plus interest at the rate of 12% per annum. The JMJ Note is convertible at any time into shares of common stock at a conversion price equal to 60% of the lowest trade price in the 25 trading days previous to the conversion date.

On March 25, 2016, the Company received net proceeds of $35,000 after expenses, for a one (1) year $40,000 face amount of 8% Convertible Note in favor of EMA Financial, LLC (“EMA Note”). The EMA Note is convertible at any time into common stock at a conversion price equal to the lower of (i) the closing sale price on the day immediately preceding the date of funding and (ii) 50% of the lowest closing sale price for the 25 consecutive trading days immediately preceding the conversion date.

In accordance with the Statement of Financial Accounting Standard ASC 820-10-35-37 Fair Value in Financial Instruments, Statement of Financial Accounting Standard ASC 815 Accounting for Derivative Instruments and Hedging Activities require that instruments with embedded derivative features be valued at their market values. The Company hired a valuation consultant to value the JMJ Note and the EMA Note for the derivative portion of the instruments. The Binomial model was used to value the derivative liability for the quarter ending March 31, 2016 at $102,288, with a derivative liability expense of $102,288.