Annual report pursuant to Section 13 and 15(d)

Notes Payable and Long-Term Debt

v3.3.1.900
Notes Payable and Long-Term Debt
12 Months Ended
Dec. 31, 2015
Debt Disclosure [Abstract]  
Notes Payable and Long-Term Debt

9 NOTES PAYABLE AND LONG-TERM DEBT

 

As of December 31, 2015 and December 31, 2014, notes payable and long-term debt consists of:

 

    December 31, 2015     December 31, 2014  
On October 26, 2011, the Company entered into a note payable in the amount of $362,257, relating to a Unit redemption agreement bearing interest at 6% per annum and is payable in equal monthly installments of $7,003, inclusive of interest   $ 91,706     $ 161,586  
                 
On December 26, 2014, the Company entered into a secured promissory note in the original amount of $950,000 which is due and payable in 24 monthly installments, without interest. The balance is due on January 1, 2017. The note is secured by a pledge agreement of the holder’s former membership units that were acquired with the proceeds. If the Company pays a total of $800,000 by December 31, 2016, the remaining balance of the note will be forgiven     720,000       950,000  
                 
Note payable to former officer due in four equal annual installments of $25,313 on April 28 of each year, non-interest bearing     101,250       -  
                 
Notes payable to seller of DigitizeIQ, LLC due as noted below ¹     747,140       -  
                 
Bridge note payable, bearing interest at 9% per annum that matures October 15, 2015     -       100,000  
      1,660,096       1,211,586  
Less current portion     1,104,159       416,645  
Long-term debt   $ 555,937     $ 794,941  

 

Common stock was issued for the bridge note payable in the amount of $100,000 on April 27, 2015, pre merger.

 

¹ Includes a series of notes as follows:

 

  ●  Issue a non-interest bearing Promissory Note made payable to the Seller in the amount of $250,000, which shall be due on November 12, 2015; (Paid February 26, 2016).
     
  Issue a second non-interest bearing Promissory Note made payable to the Seller in the amount of $250,000, which shall be due on January 12, 2016;
     
  Issue a third non-interest bearing Promissory Note made payable to the Seller in the amount of $250,000, which shall be due on March 12, 2016.

 

Pursuant to the terms of the Promissory Notes, the Company, with proper notice to the Seller, shall have a thirty (30) day grace period to cure any default resulting from the failure to pay the Seller or his assigns by the due date of each of the three listed Promissory Notes.

 

As of March 12, 2016, the $250,000 notes due January 12, 2016 and March 12, 2016 remain unpaid. The Company is renegotiating the terms of the notes. The notes bear interest at 5% per annum when in default (after the due date).

 

The notes were non-interest bearing until due. Accordingly, a debt discount at 5% per annum was calculated for the notes and is being amortized to interest expense. The net carrying value of the notes follows.

 

    2015  
       
Face value of notes   $ 750,000  
Unamortized debt discount     (2,860 )
Carrying value of notes   $ 747,140