NOTE 5: DEBT |
9 Months Ended |
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Sep. 30, 2015 | |
| Debt Disclosure [Abstract] | |
| Debt Disclosure [Text Block] |
NOTE 5: DEBT
Convertible Debt
As of December 31, 2014, the Company had outstanding convertible notes payable of $1,500,765, net of unamortized discounts of $246,615. Through the nine months ended September 30, 2015, the company borrowed an aggregate of $2,989,000, net of original issue discounts, under convertible notes payable and issued an aggregate of 1,270,325 common shares for the conversion of $50,000 in convertible debt and accrued interest. In addition, 550,000 common shares were issued with $250,000 of the borrowings. The relative fair value of these shares was determined to be $97,375 and was recognized as a discount to the note. Through the nine months to September, the company repaid eight convertible notes totaling $879,303. As of September 30, 2015, the Company had outstanding convertible notes payable of $1,619,076 net of unamortized discounts of $2,778,685. Of the outstanding balance as of September 30, 2015, $1,421,832, net of unamortized discounts of $115,489, is due within one year and classified as a current liability. The outstanding convertible notes of the Company are unsecured, bear interest between 8% and 12% per annum, mature between October 2015 and May 2018 and are convertible at fixed rates between $0.08 and $0.825 per share or at variable rates between 55% and 75% of the quoted market price of the Company’s common stock. In addition, $2,603,000 of the notes issued during the nine months ended September 30, 2015 are also convertible into 3 year common stock warrants at a conversion rate of $0.08 per warrant,. The warrants will be exercisable at $0.10 per share. All notes that were convertible during the nine months ended September 30, 2015 were accounted for as derivative liabilities (see Note 6). Aggregate amortization of the debt discounts on non-related party convertible debt for the nine months ended September 30, 2015 was $800,003 of which $56,347 was capitalized as construction in progress.
Nonconvertible Debt
As of December 31, 2014, the Company had outstanding notes payable to former affiliates of the Company of $413,185. These notes payable are unsecured, bear no interest and a due on demand. During the nine months ended September 30, 2015, the Company did not increase this balance. As at September 2015 the balance outstanding remains at $413,185.
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