Notes Payable and Long-Term Debt - Related Party
|9 Months Ended|
Sep. 30, 2017
|Debt Disclosure [Abstract]|
|Notes Payable and Long-Term Debt - Related Party||
5 NOTES PAYABLE AND LONG-TERM DEBT – RELATED PARTY
As of September 30, 2017 and December 31, 2016, notes payable and long-term debt due to a related party consists of:
SMDMM Funding, LLC and True Wireless, LLC are owned by the Company’s chief executive officer.
The payments due April 28, 2016 and 2017 for the note payable to a former director have not been made. Pursuant to the terms of the note, the note begins to accrue interest at 6% per annum and the past due portion is convertible into the Company’s common stock at a conversion price equal to 70% of the current price of the common stock. The Company has determined that the conversion feature for the past due portion of the note constitutes a derivative which has been bifurcated from the note and recorded as a derivative liability, with a corresponding discount recorded to the note. Accrued interest was $1,088 at December 31, 2016.
The director resigned in July 2017; accordingly, the note balances are included with all other notes payable at September 30, 2017.
The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.
Reference 1: http://www.xbrl.org/2003/role/presentationRef