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Notes Payable | 12 Months Ended
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Dec. 31, 2016
Notes Payable [Abstract] |
Notes Payable |
5. | Notes Payable
Notes payable are due to officers, directors, and shareholders and a commercial lender and are summarized as follows:
|  |  | Officers, Directors, and Shareholders |  |  | Commercial Lenders |  |  | Total |
| Balance at December 31, 2014 |  | $ | 27,200 |  |  | $ | - |  |  | $ | 27,200 |
| Borrowing |  |  | 105,000 |  |  |  | 200,000 |  |  |  | 305,000 |
| Repayment |  |  | (47,000 | ) |  |  | (100,000 | ) |  |  | (147,000 | )
| Conversion to common stock |  |  | (85,200 | ) |  |  | - |  |  |  | (85,200 | )
| Balance at December 31, 2015 |  | $ | - |  |  | $ | 100,000 |  |  | $ | 100,000 |
| Borrowing |  | $ | 300,000 |  |  | $ | - |  |  | $ | 300,000 |
| Repayment |  |  | (68,600 | ) |  |  | (100,000 | ) |  |  | (168,600 | )
| Debt discount |  |  | (25,035 | ) |  |  | - |  |  |  | (25,035 | )
| Balance at December 31, 2016 |  | $ | 206,365 |  |  | $ | (100,000 | ) |  | $ | 106,365 |
The Company periodically borrows from officers, directors, other related individuals, and from commercial lenders. During 2015 two shareholders, with notes totaling $85,200, converted the notes to Company stock at $0.17 per share. In January 2015, the Company borrowed $100,000 from a commercial lender. The loan required payment of principal and interest in 252 daily payments of $492 each commencing January 12, 2015. In December 2015, the Company repaid the remaining outstanding principal balance. Interest for the year ended December 31, 2015 amounted to $25,425. In November 2015, the Company borrowed $100,000 from a commercial lender. The loan incurred interest at 11% and with a maturity date of November 1, 2016. In October 2016, the Company repaid the entire principal balance. Interest expense related to this loan for the years ended December 31, 2016 and 2015 amounted to $9,479 and $1,543, respectively. In the third quarter of 2016 the Company commenced an offering pursuant to which it offered 11% subordinated promissory notes in fifty thousand ($50,000) dollar increments combined with 62,500 shares of the Company’s Common Stock for a maximum offering amount of $200,000 (the “Offering”). In August and September 2016, the Company sold promissory notes totaling $150,000 to three unrelated individuals. Two of the promissory notes totaling $100,000 are payable in February 2017 and one promissory note for $50,000 is payable in March 2017. In October 2016, the Company sold promissory notes totaling $50,000 to two unrelated individuals. These promissory notes are payable in October 2017. In connection with these promissory notes sold, pursuant to the Offering, the Company issued 250,000 shares of common stock valued at $58,750 which was recorded as a debt discount and will be amortized over the term of these notes. Amortization of the debt discounts for the year ended December 31, 2016 was $33,715. During 2016, the Company repaid $68,600 of the principle balance; and as a result, the outstanding balances of these notes as of December 31, 2016, were $131,400. The balance of debt discount related to the subordinated promissory notes is $25,035 at December 31, 2016. Interest expense related to these notes for the year ended December 31, 2016 amounted to $5,416.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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