4. NOTES RECEIVABLE

6 Months Ended

Jun. 30, 2013

NOTES RECEIVABLE

NOTES RECEIVABLE

Notes Receivable – Related Party

The following is a summary of amounts due from related parties, including accrued interest separately recorded, as of June 30, 2013:

Related party	Nature of relationship	Terms of the agreement	Principal amount			Accrued interest
Secure eHealth	Secure eHealth was a 100% owned subsidiary of the Company until December 2011. Scott Haire, former CFO of Wound Management, is the managing member of Secure eHealth.	Unsecured line of credit with interest accrued at rate of 1% per annum, due on demand.	$	293,233		$	2,232
Commercial Holding, AG	Commercial Holding AG, LLC has provided previous lines of credit to affiliates of WMT.	Unsecured note with interest accrued at rate of 10% per annum, due on demand.		200,000			33,667
	Allowance for Doubtful Accounts			(493,233	)		(35,899	)
TOTAL			$	0		$	0

Notes Receivable

The following is a summary of amounts due from unrelated parties, including accrued interest separately recorded, as of June 30, 2013:

Note receivable	Terms of the agreement	Principal amount			Accrued interest
Private Access	Convertible note receivable which accrues interest at 9% per annum, maturity date of July 31, 2013.	$	1,500,000		$	548,048
	Allowance for Doubtful Accounts		(1,500,000	)		(548,048	)
Total		$	0		$	0

The Private Access Note is with an unrelated company and the loan of $1,500,000 accrues interest at 9% per annum from the day of purchase to the maturity date of July 31, 2013. As of June 30, 2013, the Company has accrued $548,048 of interest and has established an allowance for this same amount. The Company originally acquired the Note in February of 2010 from VHGI Holdings, Inc. (“VHGI”), a Delaware corporation. The Company acquired all rights, title and interest in the Private Access Note, including the right to serve as collateral agent for the collateral pledged as security by Private Access, to the Company. Under the terms of the Security Agreement dated August 3, 2009, which was assigned to the Company by VHGI, the Company, along with other investors, holds pro rata security interests in all property of Private Access, Inc., including its intellectual property. On August 1, 2013, the Company consented to extend the maturity date of the secured convertible promissory note obligations to February 1, 2014.