Long-term debt at June 30, 2014 and 2013 consisted of the following:

Total future minimum payments due on long-term debt as of June 30, 2014 are as follows:

(1)           The Hospice convertible debenture was originally due on September 30, 2004. The note is convertible at $1.00 per share of common stock.  The effective interest rate is 17.98%.  The debenture was to begin to be paid in January 2007 over a period of 18 months at a monthly amount of $8,333. The note holder had agreed to no additional interest beyond September 30, 2004.  The Company defaulted on the debentures as of January 2007. Since that time, the lender has not had contact with the Company and has made no demand for payment. The Company has determined that the related statute of limitations for demand of payment by the lender has expired and has determined that it will not pay the debt. Accordingly, the Company wrote-off the debt during the year ended June 30, 2014 and recognized a $150,000 gain on debt extinguishment.

(2)           The unsecured Schneller convertible notes payable, with interest at 20%, originated on December 23, 2008 with a loan of $100,000 and a maturity date of December 31, 2009. The notes were convertible as defined in the loan agreements.   If the loan was not repaid by the designated date there was a loan redemption fee of $50,000 that was to be added to the principal of the note.  Effective May 5, 2010, the loan was replaced with a new convertible promissory note with the same conversion terms in the amount of $187,687 bearing interest at a rate of 20%.  The value of the conversion feature was determined to be de minimis.  If the note was in default, then Schneller was to earn for every 90 days of default, 1,336,000 shares of common stock and warrants for 1,336,000 shares of common stock exercisable at $0.05 per share for five years. At June 30, 2013, 36,072,000 of common shares and warrants for 36,072,000 common shares with a value of $638,786 were owed to Schneller and are included in accrued expenses. During fiscal 2014, an additional $53,440 was accrued by the Company under the default provisions of the debt.  At June 30, 2014, accrued expenses includes $692,225 related to amounts due to Schneller under the default provisions of the debt.  On June 30, 2014, the Company entered into a settlement agreement whereby the Company agreed to issue 3 shares of Series B convertible preferred stock in settlement for all amounts due under this promissory note.  In addition, a new promissory note dated June 30, 2014 was issued to Schneller in the principal amount of $100,000 bearing interest at a rate of 8.5% per annum with a maturity date of June 30, 2017. Interest payments in the amount of $2,125 are payable at the end of each calendar quarter starting September 30, 2014.  Since the Company did not issue the 3 shares of Series B preferred stock until subsequent to June 30, 2014, the value of these equity instruments is not included as consideration in the debt restructuring. Accordingly, the principal and interest of the original Schneller note was replaced with the new note dated June 30, 2014 in a transaction that the Company determined meets the criteria for a troubled debt restructuring. The Company recorded a gain on the debt modification of $210,451, representing the difference between the carrying amount of the old debt and the future cash flows of the new debt, and reduced the carrying value of the Schneller debt to $125,500.  Mr. Schneller was appointed to the Company’s board of directors subsequent to June 30, 2013.

(3)           The unsecured Koeting convertible note payable, with interest at 10%, originated on March 26, 2010 with a loan to the Company of $50,000 payable on July 26, 2010. The note is convertible at $0.05 per share.  The Company defaulted on the note as of July 2010.  Since that time, the lender has not had contact with the Company and has made no demand for payment. The Company has determined that the related statute of limitations for demand of payment by the lender has expired and has determined that it will not pay the debt. Accordingly, the Company wrote-off the debt during the year ended June 30, 2014 and recognized a $71,414 gain on debt extinguishment.

(4)            Effective October 2009, the Company entered into a convertible line of credit agreement with Sonoran Pacific Resources, a company affiliated with a shareholder of the Company, for a maximum amount of $1,600,000. The note is convertible into shares of the Company’s Series B preferred stock at $125,000 per share of Series B preferred stock. This agreement has been amended and modified several times. The note is secured by all assets of the Company. As modified, the loan bears interest at 10% per annum, payable monthly, and matured June 30, 2013 but includes an option for the Company to elect to extend the maturity date of the note to June 30, 2014.  Upon exercise of this option by the Company, the interest rate on the note was increased to 12% per annum.  However, the lender has allowed the interest rate to continue at the original rate of 10%. As consideration for certain of the  modifications of the loan through June 30, 2012, the Company agreed to issue the lender 100,000,000 shares of Common Stock. As of June 30, 2014 and 2013, 50,000,000 shares valued at $95,000 had not yet been issued and are included in common stock payable.   The note also includes certain restrictive loan covenants. During the year ended June 30, 2014, the Company defaulted under the payment terms and certain other covenants of the note. An Omnibus Agreement was executed February 28, 2014 regarding this and the second Sonoran note (5) wherein a waiver of default was provided and the note due date was extended to August 31, 2015. The non-default interest rate is 12% effective March 1, 2014, however, the lender has allowed the interest rate to continue at the original rate of 10%. The credit limit will automatically increase for any additional advance made by the Company or on behalf of the Company, including accrued interest. The Company is obligated to repay $352,000 on or before June 30, 2015. Failure to pay this amount will result in a default under the agreement and the interest rate will be adjusted to 18%. As of June 30, 2015, the Company had not made such payment and is considered in default.  It is in the process of entering into a revised agreement with Sonoran Pacific Resources. Accrued interest on this note is $725,363 and $439,514, at June 30, 2014 and 2013, respectively, and is included in the loan balance at each year end. The Company also agreed to issue Sonoran Pacific Resources 150,000,000 share of Common Stock as a fee in consideration of the Omnibus extension and other financial accommodations related to this loan agreement. These shares were valued at $1,200,000 and have been recorded as loan costs and are being amortized over the related life of the loan extension.  These shares have not been issued as of June 30, 2015 and the value of the shares is included in common stock payable at June 30, 2014.

(5)           In connection with note and security agreement mentioned at (4) above, this note was also provided by Sonoran Pacific Resources over the past several years at varying amounts to assist the Company for cash flow purposes. This note is convertible into shares of the Company’s Common Stock based on the average closing price of the stock for the ten trading days immediately preceding the conversion date. This agreement has been amended and modified several times. This note is secured by all assets of the Company. Principal is payable commencing the month following the month in which the Company begins to generate revenue.  Payments will be equal to 10% of the Company’s gross revenue, less any partner/strategic alliance revenue share and will be paid by the 15th of each month for all cash receipts collected by the Company in the previous month. All such payments are to be applied first to unpaid interest and then to principal. Interest is at 8% on the outstanding principal amounts and due in quarterly installments.  If any payment is not paid when due, the entire outstanding principal balance shall bear interest at 18%. Interest shall be paid in cash, or at the option of the Company, in shares of the Company’s Common Stock with such shares valued at 85% of the average closing price for shares of the Company’s Common Stock for the 10 trading days immediately preceding the interest payment date. Similar to note (4), if the note is not repaid by June 30, 2014, the interest will increase to 18% until such latter default is cured. An Omnibus agreement was executed February 28, 2014 regarding this and the first Sonoran note (4) wherein a waiver of default was provided and the note due date extended to August 31, 2015. The non-default interest rate is 8%. The default interest rate, if not paid, will be 18%. As of June 30, 2014, the Company is considered in default and in the process of entering into a revised agreement. Accrued interest on this note is $798,442 and $646,016 at June 30, 2014 and 2013, respectively, and is included in the loan balance at each year end. The conversion feature of this note, along with certain other embedded derivatives, require bifurcation and have been recorded as a liability at June 30, 2014. The value of the related liability is $304,699 at June 30, 2014 and was determined to be di minimis at June 30, 2013. The $304,699 change in the fair value of the liability is included in change in fair value of derivative liabilities on the accompanying consolidated statements of operations.

(6)  On October 20, 2005, the Company agreed to repurchase shares of several shareholders referred to as the Wellbrock Group.  The shares were exchanged for a $300,000 three-year note to be amortized over ten years at 8%. The shares of stock are held in escrow until the notes are completely paid. If there are any late payments per the payment schedule, the shares are to be released from escrow and to revert back to the original shareholders. The first ten monthly payments of principal and interest were to be in installments of $1,000 and the remaining 26 payments were to be in installments of $3,640. The balloon payment of $272,076 was due on November 1, 2008. The balloon balance was subsequently paid down to $263,492, but no further payments were made. The Company continues to be in default on this note. The Company has sought an extension/modification and has not received a response. The Company continues to accrue interest at 8%. The accrued interest payable was $108,452 and $86,847 at June 30, 2014 and 2013, respectively, and is included in the loan balance at each year end.

(7)  One of the Company’s former directors lent funds in varying amounts beginning November 5, 2010.  Outstanding principal and accrued interest was $391,259 and $371,387 at June 30, 2014 and June 30, 2013 respectively.  There is no maturity date.

(8) Various unsecured, non-interest bearing notes payable totaling $10,000 and $35,000 at June 30, 2014 and June 30, 2013, respectively. The Company has determined that the related statute of limitations for demand of payment by certain of the lenders has expired and has determined that it will not pay the related debt. Accordingly, the Company wrote-off the debt during the year ended June 30, 2014 and recognized a $25,000 gain on debt extinguishment. The remaining debt is in default as of June 30, 2014.

(9)  Genesis Finance Corporation (“Genesis”) loaned the Company $155,000 during fiscal 2012. The note accrues interest at 18%.  The note was originally due February 2012 and was being paid in installments of $2,325 on the 25th of each month. The note has been extended several times and is due August 2015. In connection with the debt extensions, the Company agreed to issue an aggregate of 1,310,000 shares of Common Stock to Genesis, none of which have been issued as of June 30, 2015. The $20,877 value of the shares has been recorded as loan costs and is being amortized over the related lives of the extensions. This note is guaranteed by Sonoran Pacific Resources, a company affiliated with a shareholder of the Company, and is secured by an interest in certain property of the guarantor. Accrued interest was $11,895 and $20,150 at June 30, 2014 and June 30, 2013, respectively, and is included in the loan balance at each year end.