Note 7. Short Term Notes and Interest Bearing Advance

9 Months Ended

Sep. 30, 2017

Notes

Note 7. Short Term Notes and Interest Bearing Advance

Note 7. Short Term Notes and Interest Bearing Advance

Short Term Note

In January 2017, the Company financed $2,694 of the premium due for liability insurance on its Mississippi property. The financing requires monthly installments of $285 of principal and interest at a rate of 12.75%. At September 30, 2017, a principal balance of $562 remained outstanding on the note.

Bank Credit Facility

Wells Fargo Bank provides an unsecured credit facility of up to $15,000 to the Company. The facility requires a variable monthly payment of amounts borrowed plus interest, which is applied at 11.24% on direct charges and 24.99% on any cash advanced through the facility. At September 30, 2017, a principal balance of $14,123 remained outstanding on the facility.

Interest Bearing Advance

On February 2, 2017, the Company borrowed $25,000 from an unrelated third party. The Company expects to enter into a formal note for these funds. However the terms of the note have not been finalized. The Note is expected to carry an annual interest rate of approximately 12.5% with a projected due date of December 31, 2017. The President of the Company has agreed to personally secure the note with an assignment of proceeds due to her under the first lien on the Diamondhead property.

The table below summarizes the short-term notes and interest bearing advance at September 30, 2017.

		Balance Owing
Description of Facility	Interest Rate	September 30, 2017
Property Liability Insurance Financing	12.75%	$ 562
Bank Credit Facility	11.24% - 24.99%	14,123
Interest Bearing Advance	12.50%	25,000
Total Short Term Notes and Interest Bearing Advance		$ 39,685