Note 8 - Convertible Notes Payable

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Convertible Debt Disclosure [Text Block]

NOTE

8:

CONVERTIBLE NOTES PAYABLE

The following table summarizes the convertible debt outstanding as of

December

31,

2016.

			Principal at		Carrying amount
Date of	Maturity	Interest	December 31,		Short term				Long term
issuance	date	rate	2016		Related		Non related		Related		Non related
3/26/1999	6/30/2004	10%	$	50,000	$	-0-	$	50,000	$	-0-	$	-0-
8/29/2008	4/1/2018	10%		150,000		-0-		-0-		-0-		150,000
8/29/2008	4/1/2020	10%		1,770,000		-0-		-0-		1,770,000		-0-
12/16/2008	4/1/2018	12%		200,000		-0-		-0-		-0-		200,000
12/16/2008	4/1/2020	12%		100,000		-0-		-0-		-0-		100,000
12/16/2008	4/1/2020	12%		4,055,000		-0-		-0-		4,055,000		-0-
9/30/2009	4/1/2018	12%		100,000		-0-		-0-		-0-		100,000
9/30/2009	4/1/2020	12%		625,000		-0-		-0-		-0-		625,000
Total			$	7,050,000	$	-0-	$	50,000	$	5,825,000	$	1,175,000

The following table summarizes the convertible debt outstanding as of

December

31,

2015.

			Principal at		Carrying amount
Date of	Maturity	Interest	December 31,		Short term				Long term
issuance	date	rate	2015		Related		Non related		Related		Non related
3/26/1999	6/30/2004	10%	$	75,000	$	-0-	$	75,000	$	-0-	$	-0-
8/29/2008	4/1/2017	10%		150,000		-0-		-0-		-0-		150,000
8/29/2008	4/1/2017	10%		1,770,000		-0-		-0-		1,770,000		-0-
12/16/2008	4/1/2017	12%		260,000		-0-		-0-		-0-		260,000
12/16/2008	4/1/2017	12%		4,055,000		-0-		-0-		4,055,000		-0-
12/16/2008	4/1/2018	12%		215,000		-0-		-0-		-0-		215,000
12/16/2008	4/1/2018	12%		25,000		-0-		-0-		25,000		-0-
9/30/2009	4/1/2017	12%		625,000		-0-		-0-		-0-		625,000
9/30/2009	4/1/2018	12%		100,000		-0-		-0-		-0-		100,000
Total			$	7,275,000	$	-0-	$	75,000	$	5,850,000	$	1,350,000

10%

Convertible Notes

During

1999

 the Company issued

10%

Convertible Notes payable in the amount of

$862,500

pursuant to a Confidential Private Placement Memorandum.

  There were costs of

$119,625

associated with this offering. The net proceeds to the Company were

$742,875.

  The notes bear interest at

10%

annually, payable semi-annually.  The notes were convertible after maturity, which was

June

30,

2004,

into shares of common stock of the Company at

$1.25

per share. We are in default in the payment of principal and interest. As of

December

31,

2016,

approximately

$812,500

of the Convertible Notes had been repaid in cash or converted into

1,495,179

shares of common stock of the Company leaving an outstanding principal balance of

$50,000.

  There was

$88,210

of accrued interest at

December

31,

2016.

Secured Convertible Debentures

On

September

30,

2009

 the Company sold an aggregate of

$1,400,000

principal amount

12%

Secured Convertible Debentures (the “Debentures”) and common stock purchase warrants (the “Warrants”) to purchase an aggregate of

5,600,000

shares of our common stock exercisable at a price of

$0.25

per share for

four

years subsequent to the closing of the transaction to

four

accredited investors including our

Chief Executive Officer and Director, Cornelis F. Wit (“Mr. Wit”).   The Company received net proceeds of

$1,400,000.

  The Debentures, which bear interest at

12%

per annum, matured on

March

30,

2011.

The Debentures are convertible at any time at the option of the holder into shares of our common stock based upon a conversion rate of

$0.25

per share.  

On

March

30,

2011

 the Company repaid

$200,000

of the outstanding principal amounts owed and extended

$1,200,000

of the convertible notes until

April

1,

2013,

including

$1,100,000

in convertible notes held by

Mr. Wit. The Company also extended the expiration date of the warrants associated with the

September

2009

offering.  

On

February

22,

2013

 the Company

and

two

holders extended

$1,200,000

of the convertible notes until

January

1,

2016,

including

$1,100,000

in convertible notes held by Mr. Wit. The expiration date of the warrants associated with the

September

2009

offering was also extended to

January

1,

2016.

On

January

31,

2015

the Company and Mr. Wit extended the maturity date of

$1,100,000

of convertible debentures to Mr. Wit, originally issued in

September

2009.

  The debentures carry an interest rate of

12%

and have a maturity date of

April

1,

2017.

  The expiration date of the warrants associated with the debentures was also extended to

April

1,

2017.

On

November

19,

2015

Mr. Wit converted

$475,000

of the convertible debentures into

1,900,000

shares of our common stock. On

November

19,

2015

the Company and Mr. Wit agreed to cancel the

1,900,000

warrants related to the

$475,000

in convertible debentures and

$475,000

of unrelated promissory notes in exchange for

1,900,000

shares of our common stock. On

November

23,

2015

Mr. Wit sold the remaining

$625,000

of convertible debentures and the related warrants to

two

unrelated non-affiliate stockholders.

On

April

1,

2015

the Company and the holder extended the maturity date of

$100,000

of convertible debentures

to

April

1,

2018.

The expiration date of the warrants associated with the debentures was also extended to

April

1,

2018.

On

June

30,

2016

the Company and

two

holders extended the maturity date of

$625,000

of convertible debentures to

April

1,

2020.

The expiration date of the warrants associated with the debentures was also extended to

April

1,

2020.

Convertible Debentures

August

2008

On

August

29,

2008

 the Company sold

$2,270,000

of convertible debentures and warrants to purchase an aggregate of

4,540,000

shares of our common stock to

four

accredited investors including our

Chief Executive Officer and Director, Cornelis F. Wit and

one

of our Directors. The convertible debentures, which bear interest at

10%

per annum, were due on

August

29,

2010.

The convertible debentures are convertible at any time at the option of the holder into shares of our common stock based upon a conversion rate of

$0.50

per share.

On

September

30,

2009

the Company and

two

Affiliates of the Company extended

$1,920,000

of the convertible debentures until

August

29,

2013

in accordance with the terms of a Secured Convertible Debenture issued on that date.

On

February

22,

2013

the Company and Mr. Wit extended the maturity date of

$1,770,000

o

f the convertible debentures to

January

1,

2016.

The expiration date of the warrants associated with the debentures was also extended to

January

1,

2016.

On

February

22,

2013

the Company and Mr. van Kesteren extended the maturity date of

$150,000

of the convertible debentures due to our

former Director, Guus van Kesteren (“Mr. van Kesteren”) to

January

1,

2015.

The expiration date of the warrants associated with the debentures was also extended to

January

1,

2015.

On

April

21,

2014

 

the Company and Mr. van Kesteren, extended the maturity date of his

$150,000

of convertible debentures to

April

1,

2016.

The expiration date of the warrants associated with the debentures was also extended to

April

1,

2016.

On

July

31,

2014

Mr. van Kesteren’s term on the Board of Directors ended. Effective on the same date, his convertible note in the amount of

$150,000

was reclassified from Related Party to Non-Related Party.

On

January

31,

2015

the Company and Mr. Wit extended the maturity date of the

$1,770,000

of convertible debentures to

April

1,

2017.

The expiration date of the warrants associated with the debentures was also extended to

April

1,

2017.

On

June

30,

2015

the Company and Mr. van Kesteren extended the maturity date of

$150,000

of convertible debentures t

o 

April

1,

2017.

  The expiration date of the warrants associated with the debentures was also extended to

April

1,

2017.

On

June

30,

2016

the Company and Mr. Wit extended the maturity date of the

$1,770,000

of convertible debentures to

April

1,

2020.

The expiration date of the warrants associated with the debentures was also extended to

April

1,

2020.

On

June

30,

2016

the Company and Mr. van Kesteren extended the maturity date of

$150,000

of convertible debentures to

April

1,

2018.

The expiration date of the warrants associated with the debentures was also extended to

April

1,

2018.

December

2008

On

December

16,

2008

 the Company sold

$5,075,000

of convertible debentures and warrants to purchase an aggregate of

10,150,000

shares of our common stock to

eleven

accredited investors including our

Chief Executive Officer and Director, Cornelis F. Wit (“Mr. Wit”), our Chief Operating Officer and President, Stephen E. Johnson (“Mr. Johnson”), our Chairman and Chief Technology Officer, Randall G. Smith (“Mr. Smith”), Chief Financial Officer, Ronald T. Linares, and

four

of our Directors. The convertible debentures, which bear interest at

12%

per annum, were due on

December

16,

2010.

The convertible debentures are convertible at any time at the option of the holder into shares of our common stock based upon a conversion rate of

$0.50

per share.

On

September

30,

2009

the Company and

seven

Affiliates of the Company extended

$4,980,000

of Convertible Notes until

December

16,

2013

in accordance with the terms of a Secured Convertible Debenture issued on that date.

On

February

22,

2013

the Company and the holders agreed to extend the maturity date of

$4,505,000

of the convertible debentures including

$4,475,000

due to

Mr. Wit,

$25,000

due to Mr. Johnson, and

$5,000

due to Mr. Smith, to

January

1,

2016.

The expiration date of the warrants associated with the debentures was also extended to

January

1,

2016.

On

February

27,

2013

the Company and Mr. Veatch extended the maturity date of

$15,000

of convertible debentures issued to our former Director

, Matthew Veatch, to

January

1,

2016.

The expiration date of the warrants associated with the debentures was also extended to

January

1,

2016.

On

March

6,

2013

 the Company and the hol

der agreed to extend the maturity date of

$200,000

of convertible debentures to

January

1,

2014.

The expiration date of the warrants associated with the debentures was also extended to

January

1,

2014.

On

March

12,

2013

 the Company and

the holder agreed to extend the maturity date of

$100,000

of convertible debentures to

January

1,

2015.

The expiration date of the warrants associated with the debentures was also extended to

January

1,

2015.

In

December

2013

 the Company and

two

holders

agreed to extend the maturity date of

$360,000,

including

$160,000

due to our former Director, Guus van Kesteren (“Mr. van Kesteren”), of convertible debentures to

January

1,

2016.

The expiration date of the warrants associated with the debentures was also extended to

January

1,

2016.

On

July

31,

2014

Mr. van Kesteren’s term on the Board of Directors ended. Effective on the same date, his convertible note in the amount of

$160,000

was reclassified from Related Party to Non-Related Party.

On

April

28,

2014

the Company and the holder extended the maturity date of

$100,000

of convertible debentures originally issued in

December

2008.

  The debentures carry an interest rate of

12%

and have a maturity date of

April

1,

2016.

  The expiration date of the warrants associated with the debentures was also extended to

April

1,

2016.

On

January

31,

2015

the Company and Mr. Wit extended the maturity date of

$4,475,000

of convertible debentures to Mr. Wit, originally issued in

December

2008.

  The debentures carry an interest rate of

12%

and have a maturity date of

April

1,

2017.

  The expiration date of the warrants associated with the debentures was also extended to

April

1,

2017.

On

November

19,

2015

the Company and Mr. Wit agreed to cancel

$420,000

of the debentures and

1,680,000

of unrelated warrants in exchange for

1,680,000

shares of our common stock.

On

April

27,

2015

 the Company and the holder extended the maturity date of

$200,000

of convertible debentures originally issued in

December

2008.

  The debentures carry an interest rate of

12%

and have a maturity date of

April

1,

2018.

  The expiration date of the warrants associated with the debentures was also extended to

April

1,

2018.

On

April

30,

2015

 the Company and Mr. Johnson extended the maturity date of

$25,000

of convertible debentures to originally issued in

December

2008.

The debentures carry an interest rate of

12%

and have a maturity date of

April

1,

2018.

The expiration date of the warrants associated with the debentures was also extended to

April

1,

2018.

The convertible debentures were repaid in full on

December

14,

2016.

On

May

1,

2015

the Company paid

$5,000

to Mr. Smith in exchange for

$5,000

of convertible debentures originally issued in

December

2008.

On

May

1,

2015

the Company and

Mr. van Kesteren extended the maturity date of

$160,000

of convertible debentures originally issued in

December

2008.

The debentures carry an interest rate of

12%

and have a maturity date of

April

1,

2017.

The expiration date of the warrants associated with the debentures was also extended to

April

1,

2017.

On

May

7,

2015

the Company and our former Director, Matthew Veatch, extended the maturity date of

$15,000

of convertible debentures to 

April

1,

2018.

  The expiration date of the warrants associated with the debentures was also extended to

April

1,

2018.

The convertible debentures were repaid in full on

December

14,

2016.

On

June

30,

2015

the Company and the holder extended the maturity date of

$100,000

of convertible debentures originally issued in

December

2008.

  The debentures carry an interest rate of

12%

and have a maturity date of

April

1,

2017.

  The expiration date of the warrants associated with the debentures was also extended to

April

1,

2017.

On

June

30,

2016

the Company and Mr. Wit extended the maturity date of

$4,055,000

of convertible debentures to

April

1,

2020.

The expiration date of the warrants associated with the debentures was also extended to

April

1,

2020.

On

June

30,

2016

the Company and Mr. van Kesteren extended the maturity date of

$160,000

of convertible debentures to

April

1,

2018.

The expiration date of the warrants associated with the debentures was also extended to

April

1,

2018.

 

The convertible debentures were repaid in full on

December

14,

2016.

On

June

30,

2016

the Company and the holder extended the maturity date of

$100,000

of convertible debentures to

April

1,

2020.

The expiration date of the warrants associated with the debentures was also extended to

April

1,

2020.

December

2009

On

December

31,

2009

 the Company sold

$1,490,000

of convertible debentures and warrants to purchase an aggregate of

5,960,000

shares of our common stock exercisable at a price of

$0.25

per share for

four

years subsequent to the closing of the transaction to

three

accredited investors including our

Chief Executive Officer and Director, Cornelis F. Wit (“Mr. Wit”).  The convertible debentures, which bear interest at

12%

per annum, matured on

June

30,

2011.

The convertible debentures are convertible at any time at the option of the holder into shares of our common stock based upon a conversion rate of

$0.25

per share.  

On

September

30,

2011

 the Company and the holders extended all

$1,490,000

of the convertible notes until

October

1,

2013,

including

$1,440,000

in convertible debentures held by

Mr. Wit.  The Company also extended the expiration date of the warrants associated with the debentures to 

December

31,

2016.

  

On

February

22,

2013

 the Company and the holders extended all

$1,490,000

of the convertible notes until

January

1,

2016,

including

$1,440,000

in convertible debentures held by

Mr. Wit.  The Company also extended the expiration date of the warrants associated with the debentures offering until

January

1,

2016.

On

January

31,

2015

the Company and Mr. Wit extended the maturity date of

$1,440,000

of convertible debentures to

April

1,

2017.

  The expiration date of the warrants associated with the debentures was also extended to

April

1,

2017.

On

November

19,

2015

Mr. Wit converted

$1,440,000

of the convertible debentures into

5,760,000

shares of our common stock. On

November

19,

2015

the Company and Mr. Wit agreed to cancel the

5,760,000

warrants related to the convertible debentures and

$1,440,000

of unrelated promissory notes in exchange for

5,760,000

shares of our common stock.

On

April

1,

2015

the Company and the holder extended the maturity date of

$50,000

of convertible debentures originally issued in

December

2009.

  The debentures carry an interest rate of

12%

and have a maturity date of

April

1,

2018.

  The convertible debentures were repaid in full on

December

7,

2015.

 

The payments required at maturity under the Company’s outstanding convertible debt at

December

31,

2016

are as follows:

2017	$	50,000
2018		450,000
2019		-0-
2020		6,550,000
Total	$	7,050,000