NOTES PAYABLE AND ACCRUED INTEREST

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

NOTES PAYABLE

NOTE 10 – NOTES PAYABLE AND ACCRUED INTEREST

As of December 31, 2012, the Company had $193,180 of notes payable and accrued interest. During the nine month period ended September 30, 2013, the Company eliminated all of the $193,180 of notes payable and accrued interest that it owed as of December 31, 2012. The details regarding the repayment of these notes payable during the nine months ended September 30, 2013 are as follows:

	Principal & Accrued Interest 12.31.12		YTD 2013 Accrued Interest		YTD 2013 Payments Made		Balance as of 09.30.13
Greners	$	153,250	$	2,750	$	156,000	$	-
Brian Sagheb		24,287		578		24,865		-
W-Net Fund I, L.P. - Revolver		15,643		-		15,643		-
	$	193,180	$	3,328	$	196,508	$	-

The $156,000 paid to Greners represents payment in full of the note payable that the Company issued in July 2012 in relation to its acquisition of Greners.com (see “NOTE 4 – ASSET PURCHASE – GRENERS.COM”). The $24,865 paid to Mr. Sagheb, a former Phototron officer, is payment in full for a loan that he made to the Company. The payment of $15,643 to W-Net Fund I, LP represents payment of the outstanding principal on a $150,000 revolving credit line. As stated above, as of September 30, 2013 the Company had repaid in full all amounts due related to the notes payable that were owed as of December 31, 2012.

On May 1, 2013, the Company entered into a Securities Purchase Agreement with a certain “accredited investor” (“Investor”), for the sale and purchase of a $280,000 original issue discount secured 0% nonconvertible promissory note due October 31, 2013 (the “OID Note”). The OID Note is secured by obligations of the Company. The Company and each of its subsidiaries has granted and pledged to the OID Note Purchaser a continuing security interest in all personal property of the Company and its subsidiaries. Except for the original issue discount, the OID Note does not carry interest unless and until there is an Event of Default, in which case the outstanding balance would carry interest at 18% per annum. The Company can prepay the OID Note, in whole or in part, at any time without penalty.

At closing, the Company received gross proceeds of $250,000 for such private placement, with the remaining $30,000 retained by the OID Note Purchaser as prepaid interest. The Company recorded the $30,000 as prepaid interest and subsequently expensed $10,000 of it during the three month period ended June 30, 2013. As of June 30, 2013, the Company had recorded $20,000 of prepaid interest that will be expensed at the rate of $5,000 per month for the months of July through October 2013.

As of September 30, 2013, the Company had a balance owed of $280,000 with regard to this OID Note.

During the nine months ended September 30, 2013, the Company was advanced, in the aggregate, $850,000 on its revolving promissory note (see “NOTE 11 – REVOLVING PROMISSORY NOTE”). On August 29, 2013, $750,000 was converted into a 7% Convertible Note (see “NOTE 16 – 7% CONVERTIBLE NOTE”), leaving an outstanding principal balance of $100,000 as of September 30, 2013. Accrued and unpaid interest related to the $100,000 principal totaled $211 as of September 30, 2013, all of which was recorded as interest expense during the three months ended September 30, 2013. The following table summarizes notes payable and accrued interest as of September 30, 2013:

	Principal		Accrued Interest		Balance as of 09.30.13
Gemini OID Note	$	280,000	$	-	$	280,000
W-Net Fund I, L.P. - Revolver		100,000		211		100,211
	$	380,000	$	211	$	380,211