CONVERTIBLE NOTES PAYABLE, NET

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

CONVERTIBLE NOTES PAYABLE, NET

NOTE 7 - CONVERTIBLE NOTES PAYABLE, NET

Convertible notes consisted of the following as of March 31, 2016 and December 31, 2015:

In January 2017, the below convertible notes payable, which were being renegotiated, and related accrued interest were converted into Common stock of the Company (Note 12).

	2016			2015
In June 2015, the Company issued 10% convertible notes with an aggregate principal amount of $700,000. The notes are secured by the assets of the Company, mature in June 2016, and are convertible into common stock of the Company at a conversion rate of $0.03 per share, subject to adjustment. In connection with the issuance of these notes, the Company also issued warrants for the purchase of 15,400,000 shares of the Company’s common stock at an exercise price of $0.05 per share for a period of five years. The conversion rate on the notes and exercise price of the warrants are subject to adjustment to anti-dilution protection that requires these features to be bifurcated and presented as derivative liabilities at their fair values. See Note 8. The Company also incurred debt issuance costs of $124,500, which are presented as a discount against the note and amortized into interest expense over the term of the note. During the three months ended March 31, 2016, one note holder elected to convert a note of $20,000 and accrued interest of $1,222 totaling $21,222 into 704,074 shares of common stock.	$	680,000		$	700,000
In July 2015, the Company issued 10% convertible notes with an aggregate principal amount of $190,000.  The notes are secured by the assets of the Company, mature in July 2016, and are convertible into common stock of the Company at a conversion rate of $0.03 per share, subject to adjustment.  In connection with the issuance of these notes, the Company also issued warrants for the purchase of 4,180,000 shares of the Company’s common stock at an exercise price of $0.05 per share for a period of five years.  The conversion rate on the notes and exercise price of the warrants are subject to adjustment for anti-dilution protection that requires these features to be bifurcated and presented as derivative liabilities at their fair values.  See Note 8. The Company also incurred debt issuance costs of $16,200, which are presented as a discount against the note and amortized into interest expense over the term of the note.	$	680,000		$	700,000
In February 2016, the Company re-issued a 12% convertible note originally maturing in the amount of $172,095. The note is secured by the assets of the Company, matures in September 2016, and is convertible into common stock of the Company at a rate of $0.10 per share.		172,095			172,095
Total Principal Outstanding	$	1,018,095		$	1,038,095
Unamortized Debt Discounts		(315,084	)		(583,049	)
Unamortized Debt issuance costs		(36,525	)		(71,700	)
Convertible Notes, Net	$	666,486		$	383,346

The following is a roll-forward of the Company’s convertible notes and related discounts for the three months ended March 31, 2016:

	Principal Balance			Debt Issuance Costs			Debt Discounts			Total
Balance at December 31, 2015	$	1,038,095		$	(71,700	)	$	(583,049	)	$	383,346
Conversions		(20,000	)		-			-			(20,000	)
Amortization		-			35,175			267,965			303,140
Balance at March 31, 2016	$	1,018,095		$	(36,525	)	$	(315,084	)	$	666,486