5. SHORT TERM DEBT

12 Months Ended

Dec. 31, 2013

Debt Disclosure [Abstract]

SHORT TERM DEBT

Term loan, notes payable, and notes payable to related party consist of the following at December 31 (in thousands):

	2013	2012
Note payable related parties (a)	$       21	$        3
Notes payable (b)	435	823
	$  456	$  826

(a) During 2012 and 2013, the Company entered into various short term notes payable with John Broderick, the Chief Executive Officer and Chief Financial Officer, for various working capital needs. The notes bear interest at 12% and were unsecured. At December 31, 2012, the Company was indebted to Mr. Broderick in the approximate amount of $3,000. No interest was paid in fiscal 2012. At December 31, 2013, the Company was indebted to Mr. Broderick in the approximate amount of $6,000. No interest was paid in fiscal 2013.

During 2013, the Company entered into a short term note payable with Antony Castagno, the Chief Technology Officer, for various working capital needs. The note was non-interest bearing and unsecured. At December 31, 2013, the Company was indebted to Mr. Castagno in the approximate amount of $15,000. No interest was paid in fiscal 2013.

(b) The Company has issued a series of short term promissory notes with private lenders, which provide for short term borrowings, both secured by accounts receivable and unsecured. The notes in the aggregate amount of $435,000 and $407,000, respectively, as of December 31, 2013, and 2012 bear interest between 10% and 36% per annum. In March 2012, the Company converted $235,000 of these previously held notes into 1,566,667 shares of Company’s common stock.

In July 2012, the Company entered into a restructuring settlement with a private lender whereby the lender agreed to accept $495,000 in full satisfaction of all principal and interest due under the Note agreements, as of June 1, 2012, plus interest in the amount of approximately $21,000 for the period from June 1, 2012 to July 31, 2012. In addition, the Company agreed to pay interest for the period after July 31, 2012 in the aggregate amount of approximately $67,000. This interest was paid in seven monthly installments of approximately $9,750 each from August 2012 through February 2013. The final payment of the remaining principal of approximately $416,000 was paid in February 2013.