XML 69 R52.htm IDEA: XBRL DOCUMENT v3.5.0.2
NOTE 9 - LONG-TERM DEBT (Details) - Schedule of Long-Term Debt - USD ($)
Dec. 31, 2015
Dec. 31, 2014
Debt Instrument [Line Items]    
Long term debt $ 7,205,385 $ 7,071,109
Less: Debt Discount (197,333) (197,333)
Total 6,976,107 6,485,498
Less: Current maturities, net of debt discount of $31,945 (2,637,344) (650,810)
Total long-term debt 4,338,763 5,834,688
Loans Payable [Member]    
Debt Instrument [Line Items]    
Less: Debt Discount (229,278) (585,611)
Note Payable Due December 31, 2017 [Member] | Loans Payable [Member]    
Debt Instrument [Line Items]    
Long term debt [1] 3,117,538 3,117,538
Note Payable Due October 1, 2017 [Member] | Loans Payable [Member]    
Debt Instrument [Line Items]    
Long term debt [2] 1,825,447 2,853,571
Note Payable Due July 1, 2016 [Member] | Loans Payable [Member]    
Debt Instrument [Line Items]    
Long term debt [3] 1,232,000 1,100,000
Note Payable Due December 31, 2015 #2 [Member] | Loans Payable [Member]    
Debt Instrument [Line Items]    
Long term debt [4] 1,000,000 0
Note Payable Due September 23, 2018 [Member] | Loans Payable [Member]    
Debt Instrument [Line Items]    
Long term debt [5] $ 30,400 $ 0
[1] In December 2013, $2 million of the original $5,000,000 Promissory note was converted to 3,333,334 shares of common stock (at $0.60/share) with 1,666,667 warrants exercisable at $1/share through December 31, 2018. The warrant was valued using the Black Scholes Option Pricing model and the Company recorded additional interest related to the conversion of debt and grant of warrants of $1,350,000. In March 2014, the note was extended to December 31, 2015 without any further considerations. On October 1, 2014, the note was extended to December 31, 2017 with the new interest rate at 6.5%. Additionally, 350,000 shares of common stock was granted as consideration for the extension.
[2] In October 2014, the Company entered into a term loan for $3,000,000. The term loan was priced at 8% over 30-day LIBOR (with a minimum floor of 2%) with a term of 36 months. The term loan, as amended, is payable over three years, $83,928.57/month from January 1, 2015 through and including December 1, 2015, and $104,910.71/month from January 1, 2016 through maturity. The Company also issued 250,000 warrants, exercisable at $0.60/share for five years.The Company calculated the fair value of the warrant as $119,991, based on a Black-Scholes Option Pricing Model using the market price of the Company's stock on the date of grant of $0.48, per share; volatility of 355%; a risk-free interest rate of 1.64%; a term of five years and zero dividend and has allocated the value of the warrant over the term note. The allocated value of the warrant of $115,000 has been recorded as a discount on the term note payable and will be amortized over three years as interest expense.
[3] In December 2014, the Company entered into a securities purchase agreement for a senior debenture in the amount of $1,232,000 at 8%. The senior debenture does not contain a provision for the debt to be converted into shares of the Company's common stock. Interest is payable on October 1, 2015 with principal payments of 25% on 1/1/2016, 25% on 4/1/2016 and the remaining 50% on 7/1/2016. The Company issued 2,053,333 warrants priced at $0.60/share. The Company is obligated to issue additional 2,053,333 warrants priced at $0.60/share in the event of a default.The Company calculated the fair value of the warrant as $841,771, based on a Black-Scholes Option Pricing Model using the market price of the Company's stock on the date of grant of $0.41, per share; volatility of 349%; a risk-free interest rate of 1.64%; a term of five years and zero dividend and has allocated the value of the warrant over the note payable. The allocated value of the warrant of $477,000 has been recorded as a discount on the note payable and will be amortized over eighteen months as interest expense.
[4] In January 2015, the Company issued a subordinated note for $1,000,000 with an interest rate of 8% to be amortized quarterly over eighteen months beginning July 1, 2016.
[5] On September 23, 2015, the Company issued an unsecured note for $32,898 at an interest rate of 6.7%, payable over 36 months.