NOTE 10 - LONG-TERM DEBT (Tables)

9 Months Ended

Sep. 30, 2016

Disclosure Text Block [Abstract]

Schedule of Long-term Debt Instruments [Table Text Block]

Long-term debt consisted of the following:

	September 30, 2016			December 31, 2015
Note payable due December 31, 2017, as extended, with interest at 6.5% per annum (a)	$	2,000,001		$	3,117,538
Note payable due October 1, 2017, plus interest at approximately 10% per annum (b)		-			1,825,447
Note payable due July 1, 2016, plus interest at 8% per annum (c)		-			1,232,000
Note payable due December 31, 2017, plus interest at 8% per annum (d)		-			1,000,000
Note payable due July 1, 2019, with interest at approximately 5% per annum (e)		12,187,500			-
Note payable due July 1, 2019, with interest at approximately 5% per annum (f)		1,311,078			-
Note payable due September 23, 2018, with interest at 6.7% per annum (g)		22,606			30,400
		15,521,185			7,205,385
Less: Debt Discount		-			(229,278	)
Total		15,521,185			6,976,107
Less: Deferred finance cost		(919,366	)		-
Less: Current maturities; net of debt discount and deferred finance cost		(4,871,027	)		(2,413,739	)
Total long-term debt	$	9,730,792		$	4,562,368

(a) In December 2013, $2 million of the original $5,000,000 promissory note was converted to 3,333,334 shares of the Company’s common stock (at $0.60/share) and 1,666,667 warrants exercisable at $1.00 per 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 maturity date of the note was extended to December 31, 2015 without any further consideration. On October 1, 2014, the maturity date of the note was extended to December 31, 2017 with an increased interest rate of 6.5%. Additionally, 350,000 shares of the Company’s common stock were granted as additional consideration for the extension. In conjunction with the July 1, 2016 financing, $1,168,058, was repaid towards this promissory note.

(b) 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. In conjunction with the July 1, 2016 financing, this loan was paid off in full.

(c) 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. In conjunction with the July 1, 2016 financing, this loan was paid off in full.

(d) 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. In conjunction with the July 1, 2016 financing, this loan was paid off in full.

(e) and (f) Please see Note 9.

(g) On September 23, 2015, the Company issued an unsecured note for $32,898 at an interest rate of 6.7%, payable over 36 months.