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Notes Payable
 12 Months Ended
Aug. 31, 2013
Payables and Accruals [Abstract]  
Notes Payable

NOTE 7 - NOTES PAYABLE

CONVERTIBLE NOTES PAYABLE:

Convertible notes payable consist of the following as of August 31, 2013 and August 31, 2012:

   August 31,  August 31,
   2013  2012
           
8.0% convertible notes due August 31, 2014  $125,000   $125,000 
           
           
Total unsecured convertible notes payable   125,000    125,000 
Less:  Current portion   (125,000)   —   
           
Long-term portion  $—     $125,000 

  

The following is a summary of future minimum payments on convertible notes payable as of August 31, 2013:

 

Fiscal Year Ending August 31, Convertible Notes Payable
2014                 $125,000

  

During May and June 2007, we issued nine Convertible Promissory Notes in an aggregate principal amount of $700,000. These Convertible Promissory Notes were due May 7, 2008, bore interest at the rate of 8% per annum and were convertible into our common stock at a rate of $1.00. Eight of these notes were converted into common stock in fiscal 2009. The remaining Convertible Promissory Note, in the principal amount of $125,000, was extended on January 28, 2010 initially to March 31, 2012 and then extended to September 30, 2013. In conjunction with the initial extension, the conversion price was reduced to $0.60. As of August 31, 2013, the Company has accrued interest in the amount of $52,575.

CONVERTIBLE RELATED PARTY NOTES PAYABLE:

   August 31,  August 31,
   2013  2012
           
6.0% convertible note due September 2013 (1)  $235,025   $235,025 
           
           
Total unsecured related party convertible notes payable   235,025    235,025 
Less:  Current portion   (235,025)   —   
           
Long-term portion  $—     $235,025 
           
(1)  Note payable to former CEO who resigned 4/1/09 and still remains a director of our subsidiary.          

 

On April 1, 2009, we issued to Ms. Lindstrom, our former Chief Executive Officer and current member of our subsidiary’s Board of Directors, a convertible promissory note in lieu of payment of $235,025 in accrued salary owed to Ms. Lindstrom. This note accrues interest at a rate of 6% per annum and was originally due on March 31, 2012. The note is convertible into shares of the Company’s common stock at a rate of $0.20 per common share. Ms. Lindstrom signed an abstention to convert this note until June 01, 2011. On March 16, 2012, Ms. Lindstrom agreed to extend the due date of the note to September 30, 2013. There was no beneficial conversion feature recognized upon the issuance of this note. As of August 31, 2013, the Company has accrued interest in the amount of $62,317.

On February 8, 2013, the Company issued a 30-Day convertible promissory note to Anthony Silverman, its former President and CEO, in the principal amount of $10,242. This convertible note was issued to pay off a previously issued 90-Day promissory note. This note bore interest at 6% and is convertible into the company’s common stock at $0.01 per shares. On February 8, 2013, Mr. Silverman elected to convert the note and accrued interest into 1,024,164 shares of common stock. The Company also recorded a $10,242 loss on the conversion of this note.

On August 23, 2012, the Company issued a convertible promissory note in principal amount of $45,000 to its President, Anthony Silverman, who is also a member of the Board of Directors. This note was issued as payment in full of the principal and accrued interest of three outstanding promissory notes in that aggregate amount. The newly issued convertible promissory note bore interest at 6% per annum and was convertible into the Company's common stock at $0.04 per share. On August 24, 2012, Mr. Silverman elected to convert this note plus accrued interest of $524 into 2,276,182 shares of the Company’s Common Stock. The company recognized a $22,758 loss upon the conversion of this note.

The following is a summary of future minimum payments on related party convertible notes payable as of August 31, 2013:

Fiscal Year Ending August 31, Related Conv. Notes Payable
2014 $235,025

 

RELATED PARTY NOTES PAYABLE:

   August 31,  August 31,
   2013  2012
6.0% note due November 2013 (1)  $4,600      
6.0% line of credit (2)   51,600      
         —   
           
Outstanding unsecured related party notes payable  $56,200   $—   
           
(1)  Note payable to current CEO.          
(2)  Note payable to current CEO payable from subsidiary, Dotolo Research Corporation.  No stated interest or due date          

 

On September 14, 2012, the Company issued a 90-Day promissory note to Anthony Silverman, its President and CEO, in the principal amount of $10,000. The note bore interest at 6% per annum. This note was further extended to February 11, 2013. On February 8, 2013, this note was paid off together with accrued interest of $242 by the issuance of a convertible promissory note. Please see Convertible Related Party Notes Payable for further information.

On October 11, 2012, the Company issued a 30-Day promissory note to Anthony Silverman, its President and CEO, in the principal amount of $5,000. The note bore an interest rate of 6%. This note was paid off, together with accrued interest of $5 on October 17, 2012.

On November 23, 2012 the Company issued a 90-Day promissory note to Anthony Silverman, its President and CEO, in the principal amount of $5,000. The note bore interest at 6% per annum. This note was paid off, together with accrued interest of $39 on January 9, 2013.

On March 8, 2013, the Company issued a 60-Day promissory note to Anthony Silverman, its former President and CEO, in the principal amount of $2,686. The note bore an interest rate of 6% and the due date has been extended to August 31, 2013. This note was paid off on August 16, 2013 together with accrued interest of $71.

On April 26, 2013, the Company issued a 10-Day promissory note to Wayne Erwin, its President and CEO, in the principal amount of $10,675. During the 4th quarter of fiscal 2013, the Company repaid $6,075 of principal on this note. The note bears an interest rate of 6% and the due date has been extended to November 30, 2013. As of August 31, 2013, the Company has accrued interest of $223.

During the last 18 months, Wayne Erwin, our President and CEO, has advanced a total of $51,600 directly to Dotolo in an open advance account. To date we have accrued $3,053 in interest. There is no specific due date on this note.

The following is a summary of future minimum payments on related party notes payable as of August 31, 2013:

Fiscal Year Ending August 31, Related Conv. Notes Payable
2014 $56,200

 

OTHER NOTES PAYABLE:

              August 31,   August 31,
              2013   2012
12% note payable due May 2014  $        15,000.00    $                    -   
Note payable                  60,600.00    
Time payment lease due January 2014              3,311.00    
Note payable - fee reimbursement            59,583.00    
18% note payable due January 2015            30,000.00    
18% note payable due January 2015            20,000.00    
18% note payable due January 2015          100,000.00    
6% note payable due August 2015          111,500.00    
6% note payable due October 2017          550,000.00    
                   
                   
  Subtotal                       949,994    
                   
Less:  Current portion                 (138,494)                          -   
                   
Long-term portion      $           811,500    $                    -   

On October 31, 2012, the Company entered into a note payable agreement to finance $10,404 of directors and officer’s insurance premiums. The note bears interest at a rate of 9.27% per annum and is due in ten monthly installments of $1,085, including principal and interest, beginning on November 30, 2012. In May 2013 we defaulted on this note and our directors and officers insurance coverage has lapsed as of May 2, 2013.

On May 23, 2013, the Company issued a one year note in the amount of $20,000. The note bears and interest rate of 12% per annum. The Company is required to repayment the note at a rate of $1,867 per month, which includes interest, on the 15th day of each month. The note is secured by certain collateral of our President and CEO.

During April 2012, our subsidiary Dotolo, entered into a financing agreement to provide up to $150,000 in funding for the subsidiary. The financing agreement was due in January 2013. After repayments, we currently owe $60,600 which is currently in default. We are currently in final negotiations with the lender on repayment.

Our subsidiary has a time lease payment which is due to be paid off in January 2014.

On August 1, 2013, in connection with our acquisition of Angels of Mercy, Inc. we entered into a promissory note to pay $65,000 of broker’s fees incurred in the acquisition. Monthly payments of $5,417 are due and payable beginning on August 15, 2013. This note bears no interest.

On February 27, 2013 our subsidiary Dotolo, entered into a note payable agreement to provide funding to its subsidiary in the principal amount of $30,000. The note bears interest at 18% payable monthly on the 15th and is due in full in January 2015.

On March 17, 2013 our subsidiary Dotolo, entered into a note payable agreement to provide funding to its subsidiary in the principal amount of $20,000. The note bears interest at 18% payable monthly on the 15th and is due in full in January 2015.

 

On May 23, 2013, the Company issued a one year note in the amount of $20,000. The note bears and interest rate of 12% per annum. The Company is required to repayment the note at a rate of $1,867 per month, which includes interest, on the 15th day of each month. The note is secured by certain collateral of our President and CEO.

On July 26, 2013 the Company issued a 18 month promissory note in the principal amount of $100,000. These funds were used for the cash down payment for the Angels acquisition. The note bears interest at 18% and requires monthly interest payments of $1,200 beginning on September 26, 2013. A final balloon payment of principal and interest in the amount of $107,800 is due on January 26, 2015.

On August 1, 2011 our subsidiary Dotolo, entered into a note payable agreement to provide funding to its subsidiary in the principal amount of $111,500. The note bears interest at 6% and matures on August 31, 2015. As of August 31, 2013 the Company has accrued interest of 12,586.

On August 1, 2013, in connection with our acquisition of Angels of Mercy, Inc. we entered into a promissory note to pay $550,000 for the purchase of Angels of Mercy, Inc. Monthly payments of $9,115 are due and payable beginning on November 1, 2013 with a final balloon payment of $205,705 due on October 1, 2017. This note bears interest at a rate of 6%.

 The following is a summary of future minimum payments on r notes payable as of August 31, 2013:

Fiscal Year Ending August 31, Related Conv. Notes Payable
2014 $203,596
2015 $344,032
2016 $87,623
2017 $314,743