Short-Term Notes Payables

12 Months Ended

Dec. 31, 2016

NOTE 5 – SHORT-TERM NOTES PAYABLES

Short-term notes payable at December 31, 2016 and 2015 consisted of the following:

	2016		2015

At Home and All Staffing acquisition note payable (1)		344,507		344,507
AOK Property Investments (2)		525,000		525,000
Note dated May 28, 2015 for $35,000; daily payment of $184.73 for 252 days		16,659		32,014
	$	886,166	$	901,521

(1) The Company entered into a $344,507 promissory note (the “Trust Note”) with the Rose. M Gallagher Revocable Trust (the “Trust”) in conjunction with a settlement agreement dated December 23, 2014. The Trust Note bears interest at 11.0% per annum. The first payment of $25,000 was due on March 1, 2015, with the final principal and interest payment due on June 1, 2015. The Company is in default of the Trust Note and has a 90-day cure period. The Company paid $5,000 on April 8, 2015.

If an event of default under the Trust Note occurs, the Trust may accelerate the Trust Note’s maturity date so that the unpaid principal amount, together with accrued interest, is immediately due in its entirety. In addition, the Company promised to pay $1,000 dollars as consideration for costs of collection of the Trust Note, including but not limited to attorneys’ fees paid or incurred on account of such collection, whether or not suit is filed with respect thereto and whether such cost or expense is paid or incurred, or to be paid or incurred, prior to or after the entry of judgment. Pursuant to the terms of the Trust Note, an event of default occurs if (i) the Company fails to make any payment required by the Trust Note when due, (ii) the Company fails to observe or perform any covenant, condition or agreement under the Trust Note, (iii) a proceeding with respect to the Company is commenced for the benefit of creditors, including but not limited to any bankruptcy or insolvency law; or (iv) the Company becomes insolvent.

(2) On October 1, 2014, AOK Property Investments LLC (“AOK”), a third party lender, lent the Company and its subsidiary, Advanced Life Management, LLC (“ALM”) , an aggregate of $500,000. In consideration of AOK’s delivery of an aggregate of $500,000 to the Company and ALM, the Company and ALM executed and delivered a promissory note (the “AOK Note”) in favor of AOK in the aggregate principal amount of $500,000. The AOK Note was due on January 15, 2015 and bears interest in the amount of 500,000 shares of the Company’s common stock, which interest was due and payable on or before January 15, 2015. If the Company and ALM fail to pay any portion of principal or interest when due, interest will continue to accrue and be payable to AOK at the rate of 1,667 shares of Company common stock per day until all principal and accrued interest is fully paid. On July 10, 2015, the Company and AOK entered in an amended note agreement whereby AOK loaned the Company an additional $25,000 and extended the due date of the note to December 31, 2015, and the Company agreed to issue an additional 500,000 shares of common stock for failing to pay the principal and interest on the loan when originally due. The Company recorded the issuance of 500,000 shares of common stock to AOK at a value of $1,360,907. The loan was not repaid on its extended due date and is currently in default.

If an event of default under the AOK Note occurs, AOK may accelerate the AOK Note’s maturity date so that the unpaid principal amount, together with accrued interest, is immediately due in its entirety. Pursuant to the terms of the AOK Note, an event of default occurs if (i) the Company or ALM fails to make any payment required by the AOK Note when due, (ii) the Company or SCI voluntarily dissolves or ceases to exist, or any final and non-appealable order or judgment is entered against the Company or SCI ordering its dissolution, (iii) the Company or ALM fails to pay, becomes insolvent or unable to pay, or admits in writing an inability to pay its debts as they become due, or makes a general assignment for the benefit of creditors; or (iv) a proceeding with respect to the Company or ALM is commenced for the benefit of creditors, including but not limited to any bankruptcy or insolvency law.

ACCELERA INNOVATIONS, INC. 10-K