Debt (Tables)

3 Months Ended

Mar. 31, 2014

Debt Tables

Debt payable to related parties

Debt payable to related parties is as follows:

	March 31, 2014		December 31, 2013
Note payable to Julie E. Jacobs Trust, a stockholder, in the amount of $50,000 with interest on the unpaid principal balance computed from the date of this loan until paid in full at the rate equal to the Wall Street Journal Prime Rate plus 4.75%, (which is 8% as of the date of the loan and at 3/31/2014) with interest payable annually on January 3rd and with the principal balance due on January 3, 2016. As an inducement to make this loan, the Company issued 400,000 warrants to purchase stock at $.24 per share which were valued at $9,372 using the Black Scholes valuation model and were recorded as a loan discount. The discount is being amortized over the life of the loan.	$	41,464		-
Note payable to The Walter Doyle Trust, a stockholder, in the amount of $50,000 with interest on the unpaid principal balance computed from the date of this loan until paid in full at the rate equal to the Wall Street Journal Prime Rate plus 4.75%, (which is 8% as of the date of the loan and at 3/31/2014) with interest payable annually on January 3rd and with the principal balance due on January 3, 2016. As an inducement to make this loan, the Company issued 400,000 warrants to purchase stock at $.24 per share which were valued at $9,372 using the Black Scholes valuation model and were recorded as a loan discount. The discount is being amortized over the life of the loan.		41,464		-
Note payable to Forest Capital, an affiliate of the Walter J. Doyle Trust, a stockholder, in the original amount of $250,000 at an annual interest rate of 10%. Effective December 13, 2009, the annual interest rate increased to 20%. On December 21, 2011, $100,000 of the note was converted to shares of stock at a price of $.25 per share and the note was amended decreasing the annual interest rate to 8% with interest payable annually on January 3rd and with the principal balance due on January 3, 2014. The note was extended on January 27, 2014 to January 3, 2016 and the interest due at January 3, 2014 was included in the new note balance of $162,107. This addition to the loan is payable to Forest Capital upon the receipt by the Company of new equity funding of $100,000 or more and is included in the current portion of related party debt. In connection with the note extension, 324,000 warrants to purchase stock at $0.24 per share were issued in return for the agreement to extend the note to January 3, 2016.		162,107	$	150,000

Note payable to Julie E. Jacobs Trust in the original amount of $100,000 at an annual interest rate of 20%. Effective September 26, 2010, the annual interest rate increased to 30% with the note payable on demand. On December 21, 2011, note was amended decreasing the annual interest rate to 8% with interest payable annually on January 3rd and with the principal balance due on January 3, 2014. The note was extended on January 27, 2014 to January 3, 2016 and the interest due at January 3, 2014 was included in the new note balance of $108,071. This addition to the loan is payable to the Julie E. Jacobs Trust upon the receipt by the Company of new equity funding of $100,000 or more and is included in the current portion of related party debt. In connection with the note extension 216,000 warrants to purchase stock at $0.24 per share were issued in return for the agreement to extend the note to January 3, 2016.		108,071		100,000
Note payable to Thelma Gault, a stockholder, in the original amount of $800,000 at an interest rate of 10%. The loan is collateralized by all assets of the Company, and on April 25, 2008 signed an agreement in which her collateralization is shared with the State of Ohio. On November 18, 2010, Thelma Gault signed an agreement subordinating up to $700,000 of debt to the Walter Doyle Trust and the Julie Jacobs Trust and to Standard Energy through the Julie Jacobs Trust. Note is due on June 1, 2014.		584,352		584,352
Total debt payable to related parties	$	937,458	$	834,352
Less current portion of debt payable to related parties		604,530		584,352
Long term debt payable to related parties	$	332,928	$	250,000

Other Debt

	March 31, 2014		December 31, 2013
Other debt is as follows:
Note payable to Ohio Innovation Loan Fund at an interest rate of 8%. Monthly payments of principal, interest, escrow, and service fees are based on the loan agreement. The loan is collateralized by all assets of the Company, and this collateralization is shared with the Thelma Gault per agreement signed on April 25, 2008. On November 29, 2010, The Director of Development for the State of Ohio signed an agreement subordinating up to $700,000 of debt to the Walter Doyle Trust and the Julie Jacobs Trust and to Standard Energy through the Julie Jacobs Trust. On December 1, 2012, Note was modified extending the due date to November 2015.	$	369,540	$	391,018
Notes payable to Merrill Lynch in the original amount of $400,000, with interest payable at Libor plus .56%. In addition, this debt is guaranteed 50% each by the Walter J. Doyle Trust and the Julie E. Jacobs Trust. As compensation for their guarantees, the trusts receive 4% per annum and share a first position lien on all assets. The note is due on demand.		396,146		396,448
Notes payable to four different investors in the original amount of $250,000 at an interest rate of 12%. On January 31, 2012, all of these notes except for a $75,000 note were converted to shares of stock at a price of $.25 per share. The $75,000 note was due June 30, 2012 and is now considered due on demand.		75,000		75,000
Other debt	$	840,686	$	862,466
Less current portion of debt payable to non-related parties		561,467		559,987
Long term debt payable to non-related parties	$	279,219	$	302,479

The principal maturities of the notes payable

The principal maturities of the notes payable for the next five years and in the aggregate are as follows:

	Period ending
	March 31,
2015	$	1,165,997
2016		612,147
2017		-
2018		-
2019		-
	$	1,778,144

Debt that was converted during the year

The following table lists debt that was converted during the year ended December 31, 2013:

Conversion of Debt Table
	Debt		Accrued Interest		Total		Stock issued
Note Converted	Extinguished		Extinguished		Extinguished		Shares
Forest Capital accrued interest on note due January 3, 2013	$	-	$	12,391	$	12,391		49,562
Julie E. Jacobs Trust accrued interest on note due January 3, 2013		-		8,260		8,260		33,042
	$	-	$	20,651	$	20,651		82,604