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LOANS FROM STOCKHOLDER AND AFFILIATE
3 Months Ended
Mar. 31, 2017
Receivables [Abstract]  
LOANS FROM STOCKHOLDER AND AFFILIATE

 

4.  LOANS FROM STOCKHOLDER AND AFFILIATE

 

On June 6, 2014, a shareholder, Lone Star Value Investors, LP, issued a promissory note to the Company in the amount of $50,000 (2014 Note).  The proceeds of the note are being used for ongoing operating expenses.   The loan bears interest at 10% per annum.  Interest on the loan and the full amount of the principal is to be repaid on June 30, 2019.

 

On August 2, 2016, the Company issued a promissory note to an affiliate of a shareholder in the amount of $40,000 (2016 Note).  The proceeds of the 2016 Note will be used for ongoing operating expenses.   The 2016 Note bears interest at 10% per annum.  Interest and principal on the 2016 Note is to be repaid on August 31, 2021, and all payments are subordinate to the payment of all outstanding amounts due under the 2014 Note.

 

During the three months ended March 31, 2017 and March 31, 2016, the Company recognized aggregate interest expense in the amount of $2,213 and $1,243 respectively. Total accrued interest on the 2014 Loan and 2016 Loan is $16,737  and $14,524 as of March 31, 2017 and 2016, respectively,  and is included as a component of long-term liabilities on the accompanying balance sheets.