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Note 6. Notes Payable. | 12 Months Ended
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Dec. 31, 2015
Notes |
Note 6. Notes Payable. | Note 6. Notes Payable. Convertible Notes Payable In accordance to ASC #815, Accounting for Derivative Instruments and Hedging Activities, we evaluated the holder's non-detachable conversion right provision and liquidated damages clause, contained in the terms governing the Note to determine whether the features qualify as an embedded derivative instruments at issuance. Such non-detachable conversion right provision and liquidated damages clause did not need to be accounted for as derivative financial instruments. Additionally, since the conversion price of the note was lower that the fair market value of the Company's common stock at the time of issuance, no beneficial conversion feature exists if the lender elected to convert. Based on that decision, no beneficial conversion feature was reflected in the financial statements. On July 8, 2014, the Company issued a convertible promissory note to Axel Springer Plug & Play Accelerator GmbH (the "Holder"), in the amount of $29,719. During 2014 and 2015 we recorded $9,555 and $0, respectively, in amortization of debt discount. As of December 31, 2015 and 2014, we had accrued interest of $2,013 and $19,285, respectively. The Convertible Note is convertible at the lessor of a market based discounted and a fixed rate derived from a fixed market cap. The Holders have the right following the Date of Issuance, and until any time until the convertible Promissory Note is fully paid, to convert any outstanding and unpaid principal portion of the Convertible Promissory Note, and accrued interest, into fully paid and non-assessable shares of Common Stock. Holder was not issued warrants with the Convertible Promissory Note. See Note 7 for description of derivative testing. Note Payable - Not Convertible On December 15, 2014, we issued a promissory note in the amount of $22,375 to a related party in consideration for payments made on behalf of the Company for service provided to the Company (the "December 2014 Note"). The December 2014 Note bears interest at the rate of 1% per annum, is due and payable on May 12, 2015. On April 21, 2015 this promissory note with interest due was repaid in full. On January 14 and 16, 2015, we issued two promissory notes in the amount of $15,000 each to two different unrelated parties in consideration for cash transferred to the Company (the "January 2015 Notes"). The Notes were issued to unrelated parties and due to the low interest rate an imputed interest expense was calculated. The January 2015 Notes bears interest at the rate of 1% per annum, are due and payable on January 14 and 16, 2016 and are not convertible to common stock. One of the notes was repaid in full on March 3, 2015 with interest due waived the by the debtor, and the second note was repaid on April 22, 2015 with interest due waived the by the debtor. During the second quarter an agreement was reached with the holder of a $120,979 advance payable note to settle the full amount due for $30,000, and interest due. The settlement with all note holders resulted in $528 loss on debt settlement due to the payment being higher than principal and accrued interest as of the settlement date as well as a charge of $90,979, that was considered a contribution of capital due to the fact that note holder, IMWT, was a related party. We concluded that these notes have a stated rate of interest that is different from the rate of interest that is appropriate for this type of debt at the date of the transaction. Accordingly, the company imputed interest at an appropriate rate estimated at 8% as prescribed under FASB ASC 835. The resultant charge of $6,280 for the period ending December 31, 2014 and $4,113 for the period ending December 31, 2015 to interest expense was considered a contribution of capital and was recorded in additional paid in capital. On November 16, 2014 four individuals loaned a total amount of $87,910 to the Company with maturity dates of November 16, 2015 and bearing an interest rate of 8% per annum. These notes were fully converted on July 16, 2015 to Company shares of commons stock and warrants as described in Note 3 resulting in a $678,027 loss on settlement of debt. Between March 31, 2015 and December 31, 2015 the Chief Scientist Ministry of Israel loaned the company an amount of $119,974. The loan bears 17% interest and shall be due and payable when the company generates sales revenue from products in development. For the periods ended December 31, 2015 and December 31, 2014 the Company has recognized $19,285 and $2,013, respectively, in accrued interest expense related to the stated interest rate on the notes. Interest expense for the periods ended December 31, 2015 and December 31, 2014, respectively, were $30,604 and $5,605 of which $9,555 and $0 is from the amortization of debt discount.

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