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SUBSEQUENT EVENTS
9 Months Ended
Sep. 30, 2011
SUBSEQUENT EVENTS [Abstract] 
SUBSEQUENT EVENTS
NOTE 11 - SUBSEQUENT EVENTS

On October 26, 2011, the Company, through a newly-formed wholly-owned Illinois subsidiary, K9 Bytes, Inc. ("K9 Sub"), entered into an Asset Purchase Contract and Receipt Agreement with K9 Bytes, Inc., a Florida corporation ("K9 Bytes" and the "Purchase Contract").  Pursuant to the Purchase Contract, the Company purchased all of K9 Bytes assets, including all of its intellectual property, its business trade name, website (k9bytessoftware.com), furniture, fixtures, equipment and inventory, accounts receivable and goodwill in consideration for an aggregate of $205,000, of which $175,000 was paid in cash at the closing and $30,000 was paid by way of a Balloon Installment Promissory Note (the "K9 Note").   The Company did not purchase and K9 Bytes agreed to retain and be responsible for any and all liabilities of K9 Bytes.  The Company agreed to indemnify and hold K9 Bytes harmless against, among other things, any claims and liability associated with the future operations of the assets purchased pursuant to the Purchase Contract and K9 Bytes agreed to indemnify and hold the Company harmless against any misrepresentations made by K9 Bytes in the Purchase Contract; any failure of K9 Bytes to perform any required term or condition of the Purchase Contract and any debts or other obligations of K9 Bytes not specifically assumed pursuant to the Purchase Contract in excess of $2,000.
 
The K9 Note accrues interest at 6% per annum and is payable in monthly installments of $333 per month starting in November 2011 and ending on October 26, 2014, at which time the then remaining balance of the K9 Note ($23,017, assuming no additional payments other than those scheduled) is due.  The repayment of the K9 Note is secured by all of the securities of K9 Sub, which owns all of the assets purchased as a result of the Purchase Contract, provided that the Third Party Lender (as defined below), as a result of the SBA Loan described below, has a first priority security interest to such securities.  The K9 Note is also personally guaranteed by Shaun Passley, our Chief Executive Officer.

The Company raised the funds paid to K9 Bytes in connection with the Purchase Contract through a $235,000 Small Business Association loan obtained by K9 Sub from a third party lender (the "Third Party Lender" and the "SBA Loan").  The SBA Loan has a term of ten (10) years; bears interest at the prime rate plus 2.75% per annum (currently 6%), adjusted quarterly; is payable in monthly installments (beginning in December 2011) of $2,609 per month; is guaranteed by the Company and personally guaranteed by Shaun Passley, the Company's Chief Executive Officer; and is secured by all of the assets of K9 Sub and the Company, 100% of the outstanding capital of K9 Sub which is held by the Company, and a life insurance policy on Mr. Passley's life in the amount of $235,000.  A total of approximately $10,000 of the amount borrowed under the SBA Loan was used to pay closing fees in connection with the loan, $175,000 was used to pay K9 Bytes the cash amount due pursuant to the terms of the Purchase Contract and $50,000 of such loan amount was made available for working capital for the Company and K9 Bytes Illinois.

K9 Bytes agreed to subordinate the K9 Note to Third Party Lender's rights under the SBA Loan.  Additionally, Mr. Passley agreed to subordinate the amount he is owed by the Company to the repayment of SBA Loan.