NOTES PAYABLE

12 Months Ended

Dec. 31, 2016

NOTES PAYABLE

NOTES PAYABLE

NOTE 4 – NOTES PAYABLE

Sterling National Bank

On September 8, 2010, in order to fund increasing accounts receivables and support working capital needs, Capstone secured a Financing Agreement from Sterling Capital Funding (now called Sterling National Bank), located in New York, whereby Capstone receives funds for assigned retailer shipments. The assignments provide funding for an amount up to 85% of net invoices submitted.  There will be a base management fee equal to .45% of the gross invoice amount. The interest rate of the loan advance is .25% above Sterling National Bank's Base Rate which at time of closing was 5%. As of December 31, 2016, and 2015, the interest rate on the loan was 5.25%. The amounts borrowed under this agreement are due on demand and collateralized by substantially all the assets of Capstone.

As of December 31, 2016, and 2015, the balance due to Sterling National Bank was $0 and $2,275,534, respectively.

As of December 31, 2016, the maximum amount that can be borrowed on this credit line is $7,000,000.