Deferred Financing Costs, Net

3 Months Ended

Mar. 31, 2014

Notes to Financial Statements

Note 4. DEFERRED FINANCING COSTS, NET

	March 31,			December 31,
	2014			2013
Deferred financing costs	$	153,454		$	139,990
Less Accumulated Amortization		(108,338	)		(101,655	)
Deferred financing costs, net	$	45,116		$	38,335

Amortization expense for deferred financing costs for the periods ended March 31, 2014 and 2013 was $6,683 and $8,361, respectively. In January 2014, the notes payable to Forest Capital for $150,000 and the Julie Jacobs Trust for $100,000 were modified extending the maturity date by two years and the unpaid interest on each of these notes was added to the loan balance. As an inducement to extend the notes term and add the interest due and unpaid interest to the notes balance, the Company issued 324,000 warrants to Forest Capital and 216,000 warrants to the Julie Jacobs Trust. The cost of the warrants was valued at $13,464 using the Black Scholes valuation model and was added to deferred financing costs which will be amortized over the remaining life of the loan.