10.

Notes Payable and Advances from Related Parties

On January 17, 2012, the Company assumed from MIT a note payable with Los Alamos National Bank (“LANB”) in the amount of $700,000. On February 10, 2012, MIT refinanced with LANB the principal and accrued interest of this note payable with a promissory note of $708,000, maturing on April 2015. The note renews annually. The monthly payment to LANB on the promissory note is $10,000, with the interest rate of 5.5% at March 31, 2014. The promissory note is guaranteed by the Company and secured by all assets of the Company. Total interest paid on the promissory note was $25,000 during the nine months ended September 30, 2014. The note’s outstanding amount was $482,000 at September 30, 2014.

As of September 30, 2014, the Company had outstanding advances of $623,000, from their former CEO and the CFO to help fund operations. The notes are unsecured and non-interest bearing.

The Company entered into a capital lease for equipment at interest rate of 7.25%, payable through 2018. The assets and liabilities under the capital lease are recorded at the present value of the minimum lease payments and are depreciated over their estimated useful lives. The gross amount of assets held under capital lease at September 30, 2014 and December 31, 2013 was $12,800, respectively, with accumulated depreciation of $2,910 and $1,165, respectively.

Future maturities of notes payable, advances and capital leases are as follows (in thousands):

September 30,
2015	$	1,112
2016		4
2017		1

Note payable – noncurrent portion, advances and capital leases	$	1,117