Note 8 - Long-term Debt

12 Months Ended

Dec. 31, 2014

Notes

Note 8 - Long-term Debt

Note 8 – Long-Term Debt

Our long-term debt consisted of the following at December 31:

	2014	2013
Note payable to an individual due July 20, 2016, interest at 14%	$30,000	$30,000
Less discount	(3,240)	(6,915)
Net	26,760	23,085
Current portion	22,598	13,979
Long-term portion	4,162	9,106
Long-term convertible debentures, net of discount from Note 4	5,638	-
Long-term debt	$9,800	$9,106

The long-term debt has been recorded net of a discount for the value assigned to shares of our common stock and detachable warrants issued in connection with the origination of the notes.  The discount is amortized to interest expense over the term of the notes.  Pursuant to an Amendment to Security Agreement, the warrants were subsequently cancelled.

Payment terms for the $30,000 notes payable are $350 per month for six months and $698 per month for sixty months, including interest.  We are in default on the $30,000 note payable at December 31, 2014 due to our failure to make timely payments in accordance with the terms of the note agreement.