Annual report pursuant to Section 13 and 15(d)

NOTE 4. NOTES PAYABLE

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NOTE 4. NOTES PAYABLE
 12 Months Ended
Dec. 31, 2013
Notes to Financial Statements  
NOTE 4. NOTES PAYABLE

Note payable to related party, unsecured, due 8/3/2012, interest rate 0%   $ 1,950     $ 1,950  
                 
Notes payable to related parties, unsecured, due 12/31/2012, interest rate 0%   $ 11,810     $ 11,810  
                 
Note payable to non-related party, unsecured, due 2/8/12, quarterly interest due, convertible at holder’s option at $0.3235688 per TBT-DE share, interest rate 30%   $ 10,000     $ 10,000  
                 
Note payable to non-related party, unsecured, due 2/8/12, quarterly interest due, convertible at holder’s option at $0.3235688 per TBT-DE share, interest rate 30%   $ 25,000     $ 25,000  
                 
Note payable to non-related party, unsecured, due 2/17/12, quarterly interest due, convertible at holder’s option at $0.3235688 per TBT-DE share, interest rate 30%   $ 25,000     $ 25,000  
                 
Note payable to non-related party, unsecured, due 2/18/12, quarterly interest due, convertible at holder’s option at $0.3235688 per TBT-DE share, interest rate 30%   $ 10,000     $ 10,000  
                 
Note payable to non-related party, unsecured, due 2/18/13, annual interest due, convertible at holder’s option at $0.3235688 per TBT-DE share, interest rate 18%   $ 750     $ 750  
                 
Note payable to non-related party, unsecured, due 2/18/13, annual interest due, convertible at holder’s option at $0.3235688 per TBT-DE share, interest rate 18%   $ 6,875     $ 6,875  
                 
Note payable to non-related party, unsecured, due 2/15/13, annual interest due, convertible at holder’s option at $0.3235688 per TBT-DE share, interest rate 12%   $ 2,500     $ 2,500  
                 
Note payable to non-related party, unsecured, due 2/20/13, annual interest due, convertible at holder’s option at $0.3235688 per TBT-DE share, interest rate 12%   $ 3,750     $ 3,750  
                 
Note payable to non-related party, unsecured, due 2/21/13, annual interest due, convertible at holder’s option at $0.3235688 per TBT-DE share, interest rate 12%   $ 2,625     $ 2,625  
                 
Note payable to non-related party, unsecured, due 3/20/13, annual interest due, convertible at holder’s option at $0.3235688 per TBT-DE share, interest rate 12%   $ 5,433     $ 5,433  
                 
Note payable to non-related party, unsecured, due 3/22/13, annual interest due, convertible at holder’s option at $0.3235688 per TBT-DE share, interest rate 12%   $ 3,203     $ 3,203  
                 

Note payable to non-related party, unsecured, due 1/05/13, annual interest due, convertible at holder’s option at 51% of market as defined, interest rate 8%, conversion limited to total beneficial

ownership of 4.99% (fully converted as of 12/31/2013)

   $ -     $ 10,500  

 

Note payable to non-related party, unsecured, due 2/25/13, annual interest due, convertible at holder’s option at 51% of market as defined, interest rate 8%, conversion limited to total beneficial ownership of 4.99%   $ 23,904     $ 37,500  
                 
Note payable to related party, unsecured, $731,763, 5-years at 0% simple interest, due 7/1/2016, payment amounts vary each month, various late penalties.   $ 726,763     $ 726,763  
                 
Note payable to non-related party, unsecured, due 4/19/13, annual interest due, convertible at holder’s option at 51% of market as defined, interest rate 8%, conversion limited to total beneficial ownership of 4.99%   $ 52,500     $ 35,000  
                 
Note payable to non-related party,unsecured,due 08/29/2013, simple interest 8% convertible at holder’s option at $.249 per TBT-CA share.   $ 15,000     $ 15,000  
                 
Note payable to non-related party, unsecured, due 03/01/2013, simple interest 9%.   $ 5,000     $ 5,000  
                 
Note payable to non-related party, unsecured, due 01/31/2013, $12,000 in interest (2 months) (fully paid as of 12/31/2013)   $ -     $ 32,000  
                 
Note payable to non-related party, unsecured, due 12/13/2013, simple interest 7%.   $ 5,342     $ 5,342  
                 
Note payable to non-related party, unsecured, due 01/31/2013, simple interest 18%.   $ 3,938     $ 3,938  
                 
Note payable to non-related party, unsecured, due on demand, simple interest 7%, convertible at anytime into common stock at 65% of market closing price on previous day   $ 25,000     $ -  
                 
Note payable to non-related party unsecured, due 01/07/2014, simple interest 7%, default interest 10%, stock option   $ 15,000     $ -  
                 
Note payable to non-related party, unsecured, due 01/15/2014, simple interest 7%, default interest 10%, stock option   $ 5,000     $ -  
                 
Note payable to non-related party, unsecured, due 01/20/2014, simple interest 7%, default interest 10%, stock option   $ 65,272     $ -  
                 
Note payable to non-related party, unsecured, due 03/28/2013, $13,000 in interest (1 month)   $ 32,000     $ -  
                 
Note payable to non-related party, unsecured, due 01/23/2014, simple interest 9%,   $ 50,000     $ -  
                 
Note payable to non-related party, unsecured, due 04/28/2014, simple interest 7%, default interest 10%, stock option   $ 9,440     $ -  
                 
Note payable to non-related party, unsecured, due 05/25/2014, simple interest 7%, default interest 10%, stock option   $ 50,060     $ -  
                 
Note payable to non-related party, unsecured, due 07/02/2014, simple interest 9%,   $ 15,000     $ —    
                 
Note payable to non-related party,unsecured, due 10/25/2013, simple interest 18%,   $ 2,000     $ —    
                 
Note payable to non-related party, unsecured, due 07/29/2014, simple interest 7%, default interest 10%, stock option   $ 1,900     $ —    
                 
Note payable to non-related party, unsecured, due 09/19/2014, simple interest 7%, default interest 10%, stock option   $ 10,000     $ —    
                 
Note payable to non-related party, unsecured, due 09/19/2014, simple interest 7%, default interest 10%, stock option   $ 65,000     $ —    
                 
Note payable to non-related party, unsecured, due 09/29/2014, simple interest 7%, default interest 10%, stock option   $ 20,000     $ —    
                 
Note payable to non-related party, unsecured, due 12/27/2013, simple interest 9%,   $ 15,000     $ —    
                 
Note payable to non-related party, unsecured, due 10/28/2014, simple interest 7%, default interest 10%, stock option   $ 2,500     $ —    
                 
Note payable to non-related party, unsecured, due 10/29/2014, simple interest 7%, default interest 10%, stock option   $ 10,000     $ —    
                 
Note payable to non-related party, unsecured, due 11/10/2014, simple interest 7%, default interest 10%, stock option   $ 5,000     $ —    
                 
Note payable to non-related party, unsecured, due 11/12/2014, simple interest 9%, Convertible up to the due date   $ 11,000     $ —    
                 
Note payable to non-related party, unsecured, due 11/20/2014, simple interest 7%, default interest 10%, stock option   $ 20,000     $ —    
                 
Note payable to non-related party, unsecured, due 12/02/2014, simple interest 7%, default interest 10%, stock option   $ 5,000     $ —    
                 
Note payable to non-related party, unsecured, due 01/27/2014, simple interest 10%   $ 5,000     $ —    
                 
    $ 1,375,861     $ 979,939  
                 
Less current portion     (1,208,854 )     (616,051 )
                 
 
Less note discount		   $ 22,996       38,072  
                 
Long-term portion   $ 167,007     $ 363,888  

 

Required principal payments from December 31, 2013 forward are as follows:

 

2014   $ 812,932  
2015   $ 123,709  
2016   $ 43,298  
2017   $ -  
    $ 979,939  

 

Interest expense under notes payable for the year ended December 31, 2012 and December 31, 2013 was $118,194 and $170,428, respectively.

 

During the year ended December 31, 2012 and December 31, 2013 the Company recognized a beneficial conversion feature expense on borrowing from convertible notes of $112,064 and $94,161, respectively. During the year December 31, 2012 and December 31, 2013 the unamortized note discount from the beneficial conversion feature was $38,072 and $22,996, respectively.

 

In 2012 the company borrowed $110,000 under convertible notes with a variable conversion price based on a percentage of market price. Notes converted at December 31, 2012 and December 31, 2013 were $27,000 and $47,500, respectively. The Company determined that these notes have an embedded derivative and are therefore accounted for at fair value. The Company recorded fair market value adjustments at December 31, 2012 and December 31, 2013 of $448,137 and $11,969, respectively. The fair market value adjustments were based on the Black-Sholes method using the following assumptions: risk free rate of 0.08%, dividend yield of 0%, expected life of 1 year, volatility of 172% - 197%. The fair value equity obligation liability under the notes at December 31 2012 and December 31, 2013 were $463,037 and $150,067, respectively.