6. Notes Receivable-Sale of Business

6 Months Ended

Jun. 30, 2012

Notes to Financial Statements

6. Notes Receivable-Sale of Business

Pennsylvania Stores

Effective June 30, 2009, the Company sold all of the outstanding stock of the subsidiary that operated the three remaining Pennsylvania stores included in the former network of retail brokerage outlets (the “Pennsylvania Stock”).  The purchase price for the Pennsylvania Stock was approximately $397,000 which was paid by delivery of two promissory notes (the “Pennsylvania Notes”), one in the approximate principal amount of $238,000 and payable with interest at the rate of 9.375% per annum in 120 equal monthly installments, and the other in the approximate principal amount of $159,000 and payable with interest at the rate of 6% per annum in 60 monthly installments commencing August 10, 2011 (with interest only being payable prior to such date). Effective August 10, 2011, the Pennsylvania Notes were restructured into one note with a principal balance of $361,625. The restructured note provides for interest at the rate of 8.63% per annum and is payable in 102 equal monthly installments of $5,015. There was no gain or loss recorded on the restructuring of the Pennsylvania Notes.

Franchise Business

Effective May 1, 2009, the Company sold all of the outstanding stock of the subsidiaries that operated the DCAP franchise business (collectively, the “Franchise Stock”).  The purchase price for the Franchise Stock was $200,000 which was paid by delivery of a promissory note in such principal amount (the “Franchise Note”).  As of May 1, 2011, the terms of the Franchise Note called for installments of $50,000 on May 15, 2009, $50,000 on May 1, 2010, both of which were paid, and $100,000 plus accrued interest on May 1, 2011 and provided for interest at the rate of 5.25% per annum. On May 1, 2011, the Franchise Note was amended. Under the amended Franchise Note, the payment due on May 1, 2011 was reduced to a principal payment only of $75,000. The remaining balance of $25,000 plus accrued interest of $12,797 was due on May 1, 2012, which was paid.

Notes receivable arising from the sale of businesses as of June 30, 2012 and December 31, 2011 consists of:

	June 30, 2012						December 31, 2011
	Total		Current				Total		Current
	Note		Maturities		Long-Term		Note		Maturities		Long-Term
	(unaudited)
Sale of Pennsylvania stores	$	336,681	$	32,391	$	304,290	$	351,861	$	31,028	$	320,833
Sale of Franchise business		-		-		-		37,797		37,797		-
		336,681		32,391		304,290		389,658		68,825		320,833
Accrued interest		2,421		2,421		-		3,853		3,853		-
Total	$	339,102	$	34,812	$	304,290	$	393,511	$	72,678	$	320,833