5. NOTES PAYABLE (Tables)

6 Months Ended

Jun. 30, 2013

The Following Is A Summary Of Amounts Due To Related Parties

The Following Is A Summary Of Amounts Due To Related Parties

Related party	Nature of relationship	Terms of the agreement	Principal amount		Accrued interest
Lutz Investments, LP	Mr. Lutz is the CEO of the Company	Convertible note payable due March 31, 2012. The note is convertible at $0.19 per share. As of June 30, 2013, the note has not been converted and is past due.	$	200,000	$	23,165
Dr. Philip J. Rubinfeld	Mr. Rubinfeld is a member of the Board of Directors	See “Third Quarter 2012 Secured Subordinated Promissory Notes” As of June 30, 2013, $100,000 of this note remains due.		100,000		15,483
Araldo A. Cossutta	Mr. Cossutta is a member of the Board of Directors	See “Third Quarter 2012 Secured Subordinated Promissory Notes” As of June 30, 2013, $75,000 of this note remains due.		75,000		11,612
MAH Holding, LLC	MAH Holding, LLC has provided previous lines of credit to affiliates of WMT.	Unsecured note with interest accrued at 10% per annum, due on demand.		40,620		8,667
Total			$	415,620	$	58,927

Summary of amounts due to unrelated parties, including accrued interest

Note payable	Terms of the agreement	Principal amount		Discount		Principal net of discount		Accrued interest
March 4, 2011 Note Payable	$223,500 note payable; (i) interest accrues at 13% per annum; (ii) maturity date of September 4, 2011; (iii) $20,000 fee due at maturity date with a $1,000 per day fee for each day the principal and interest is late. This note is currently the subject of litigation (see Note 3 “Significant Transactions -"Litigation)	$	223,500		-	$	223,500	$	44,147
Purchase Order Financing Agreement	$50,000 note payable; (i) interest accrues at 10% per annum; (ii) proceeds used to purchase inventory; (iii) lender will be reimbursed $25 per gram as the inventory is sold. As of June 30, 2013 the lender is due $40,500 of sales proceeds.		38,822		-		38,822		2,797
Third Quarter 2012 Secured Subordinated Promissory Notes	Seventeen notes (including two with related parties mentioned above) in the original aggregate principal amount of $1,055,000; (i) 5% interest due on maturity date; (ii) maturity date of October 12, 2012; (iii) after the maturity date interest shall accrue at 18% per annum and the Company shall pay to the note holders, on a pro rata basis, an amount equal to twenty percent of the sales proceeds received by the Company and its subsidiary, WCI, from the sale of surgical powders, until such time as the note amounts have been paid in full. As of June 30, sixteen of these notes remain due in the aggregate principal amount of $1,035,000, of which thirteen are with unrelated parties. Additionally, $78,980 of surgical sales proceeds have not been remitted to the note holders.		860,000		-		860,000		133,154
September 19, 2012 Promissory Note	$20,000 note payable; (i) interest accrues at 10% per annum; (ii) maturity date of December 31, 2012; (iii) warrant to purchase 20,000 shares of common stock at an exercise price of $0.15 per share to be issued upon default. As of December 31, 2012 this note was not paid and the 20,000 warrants were issued to the note holder. As of June 30, 2013, the $20,000 balance is past due.		20,000		-		20,000		1,562
September 28, 2012 Promissory Note	$51,300 note payable (i) interest accrues at 10% per annum; (ii) maturity date of December 31, 2012; (iii) default interest rate of 15% per annum. As of June 30, 2013, this note is past due.		51,300		-		51,300		5,180
June 21, 2011 Note	Convertible promissory note in the principal amount of $560,000; (i) interest accrues at 12% per annum; (ii) maturity date of June 21, 2015; (iii) upon closing the Company issued to the lender 100,000 shares of Common Stock valued at $60,000 and two warrants to purchase 250,000 shares of common stock each, with exercise prices of $0.50 $1.00; (iv) the debt is convertible at a 30% discount on the fair market value of the stock. The Company measured the fair value of the warrants and the beneficial conversion feature of the note and recorded a discount against the principal of the note. (see Note 3 "Significant Transaction - Forbearance Agreement")		200,000		-		200,000		-

March 2012 Convertible Notes	Three convertible notes in the principal amount of $25,000, $50,000 and $100,000 respectively; (i) issued between March 3 and March 22, 2012; (ii) convertible at $0.19 per share; (iii) interest accrues at 5% per annum; (iv) interest accrues at 9% per annum after the due dates between March 31 and June 30, 2012. As of the date of this filing these notes are past due.		175,000		-			175,000		18,699
Second Quarter 2012 Convertible Notes	Two $25,000 notes; (i) issued on April 3 and April 23, respectively; (ii) convertible at $0.19 per share; (iii) interest accrues at 5% per annum; (iv) interest accrues at 9% per annum after the due dates of April 30 and June 30, 2012, respectively. On September 20, 2012, 222,420 shares of Common Stock were issued in conversion of the April 23 note. As of the date of this filing the April 3 note is past due.		25,000		-			25,000		2,760
May 30, 2012 Convertible Note	Note in the principal amount of up to $275,000 including an approximate original issue discount of 10%; (i) maturity date one year from the effective date (ii) convertible at the lesser of $0.19 or a 30% discount on the fair market value of the Company's common stock; (iv) one time interest charge of 5% will be applied if the note is not repaid within the first 90 days.		102,673		(50,718	)		51,955		2,750
February 19, 2013 Convertible Notes	Two $250,000 promissory notes; (i) due upon the Company’s achievement of certain revenue targets; (ii) interest accrues at 10% per annum (iii) convertible at the option of the holder into shares of the Company’s common stock at a conversion price of $.07 per share, or into an equivalent number of shares of the Company’s Series C Preferred Stock.		500,000		-			500,000		18,082
May 13, 2013 Promissory Note	Note in the principal amount of up to $142,000; (i) interest accrues at 10% per annum; (ii) proceeds used to purchase inventory; (iii) maturity date of May 13, 2015; (iv) lender will be reimbursed all net revenues collected on inventory purchased with note proceeds on a monthly basis until the note is paid in full.		71,357		-			71,357		874
June 19, 2013 Promissory Note	$50,000 note payable; (i) interest accrues at 9% per annum; (ii) the principal is due and payable as follows: (a) $5,000 each on August 19, 2013 and September 19, 2013; and (b) $10,000 on October 19 and November 19, 2013 and (c) $20,000 on December 19, 2013, the maturity date; (iii) the Company will issue to Lender a five-year warrant to purchase a total of 225,000 shares of common Stock at a price of $0.09 per share. Additionally, the Company will issue warrants to purchase 375,000 common shares at $0.09 exercisable only upon an event of default.		50,000		-			50,000		150
June 24, 2013 Promissory Note	$40,000 note payable; (i) interest accrues at 10% per annum; (ii) the principal is due and payable as follows: (a) $5,000 each on July 25, 2013 and August 25, 2013; and (b) $10,000 each on September 25, 2013, October 25, 2013, November 25, 2013(the maturity date); (iii) the Company will issue to Lender a five-year warrant to purchase a total of 175,000 shares of common Stock at a price of $0.09 per share.		40,000		-			40,000		78
Total		$	2,357,652	$	(50,718	)	$	2,306,934	$	230,233