Line of Credit and Note Payable

9 Months Ended

Sep. 30, 2011

Line of Credit and Note Payable [Abstract]

LINE OF CREDIT AND NOTE PAYABLE

NOTE — 8 LINE OF CREDIT AND NOTE PAYABLE

On June 28, 2007 the Company secured a $1 million line of credit from a stockholder. This borrowing was amended to $1,300,000 as of September 30, 2008 under the same terms and conditions as the original. The $1.3 million Line of Credit was converted into shares of Milestone’s common stock in December 2009 at a conversion rate of $1.58 per share. A total of 822,785 shares were issued and the debt liquidated at that date. Interest accrued on the Line of Credit of aggregated $68,082 and $88,021 as of September 30, 2011 and December 31, 2010, respectively. $23,000 of this accrued interest was paid in the nine months ended September 30, 2011. The remaining interest will be paid in 2012. The Company borrowed an additional $450,000 from the same shareholder in 2008. The borrowing was originally on short term loan with a maturity date of January 19, 2009. In December 2008, this borrowing was refinanced with the shareholder with a due date of June 30, 2012. The loan was refinanced again on June 29, 2011, without cost to the Company, and the due date was extended to July 2013. The borrowing includes a 12% interest rate, interest compounded quarterly, with interest and principal due at the maturity. Further, the note has warrants exercisable for five years at the price of $0.32 per share for 45,000 shares of stock. The warrants were valued using the Black-Scholes model and are reflected as a discount against the debt. At September 30, 2011 and December 31, 2010, the remaining unamortized discount was $4,597 and $8,361, respectively.

Interest expense on this Line of Credit for the nine months ended September 30, 2011 and 2010 is $59,622 and $45,841, respectively. Accrued interest related to the line of credit was $249,287 and $214,824 at September 30, 2011 and December 31, 2010, respectively. The charge for amortization of Debt Discount related to this Line of Credit is $3,764 and $2,097 for the nine months ended September 30, 2011 and September 30, 2010, respectively.