Other Notes Payable

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Note 7. Other Notes Payable

At December 31, 2015, included in other current liabilities were four outstanding notes to various individuals aggregating $177,370 in principle and accrued interest, respectively. Interest accrued at the rate of 9% - 14% per annum. These notes were related to the former management and officers of the Company who were removed from their positions beginning in December 2013, when Doug Beplate became CEO and appointed new management and officers. The former management and officers have not been involved with the Company since that time and it was determined these amounts were not owed. Accordingly, the loan balances and related accrued interest totaling $258,338 were written off and recorded in additional paid-in capital during 2016. The Company also determined $40,390 of prior related party accounts payable should be written-off and was recorded in additional paid-in capital during 2016.

During the year ended December 31, 2016, the Company received $150,000 related to a note payable. The note is due on demand and interest accrues at the rate of 10% per annum. The balance of $150,000 was owed as of December 31, 2017 and 2016.

During the year ended December 31, 2017, the Company received a total of $75,000 related to a note payable. The note had a maturity date of May 15, 2017 and interest accrues at the rate of 20% per annum and is currently in default. The Company paid $42,500 during the period and the balance of $32,500 and $0 was owed as of December 31, 2017 and December 31, 2016, respectively.

The Company borrowed $35,000 in April 2017 related to a note payable, with original issue discount of $3,500. The note was paid off in full in May 2017.

The Company has recognized a "Liability for unissued shares" for shares granted to employees and consultants along with shares purchased by investors, but unissued as of the balance sheet date. The granted shares are recorded at the fair market value of the shares to be issued at the grant date and a corresponding current liability is recorded for these unissued shares. The activity in this account and balances, classified as Liabilities for unissued shares, as of December 31 was as follows:

	2017		2016
Balance, beginning	$	145,543	$	145,543
Reclass of previous shares purchased and recorded in equity		66,300		-
Issuance of shares in satisfaction of liability		-		-
Balance, ending	$	211,843	$	145,543

The total number of shares granted but unissued were 2,483,806 and 1,579,044, as of December 31, 2017 and 2016, respectively.