Annual report pursuant to Section 13 and 15(d)

DEBT

v2.4.1.9
DEBT
 12 Months Ended
Dec. 31, 2014
Debt Disclosure [Abstract]  
DEBT

NOTE 9 – DEBT

 

In June 2011, we issued an unsecured promissory note to a third party in the amount of $40,000 (the “June 2011 Note”) bearing interest at a rate of 10% per annum and a three year warrant to purchase 13,000 shares of our common stock at an exercise price of $1.00 per share.  In addition, a second note payable, to the same third party, in the amount of $25,000 plus $3,000 of accrued interest was also converted into the June 2011 Note, resulting in a new principal balance of $68,000.  Principal payments were due beginning November 2011 and the June 2011 Note is in default as of December 31, 2014 and 2013, as no payments have been made to date.  We valued the warrant at $170 using the Black-Scholes model and recorded this amount as a debt discount.  The debt discount was fully amortized during 2011.

 

The Company entered into a loan agreement evidenced by a convertible secured promissory note with Advanced Technology Materials, Inc. (“ATMI”) on February 14, 2012.  The amount of the convertible secured promissory note was $225,000.  The loan agreement allows for an additional $225,000 to be borrowed upon meeting certain defined milestones and stipulates the Company provide the lenders, among other things, a security agreement which also identifies the collateral, a development agreement, and use the loan proceeds for projects and transactions contemplated in the term sheet and development agreement.  The registration rights agreement has not been executed by the parties to the loan. The note bears interest at 5 percent per annum.  The entire loan and/or unpaid balance of the loan and accrued interest can be converted into the Company’s common stock at $0.50 per share at any time at the option of the holder.  In December 2014, the promissory note and accrued interest was purchased by two shareholders of the Company from ATMI.  In January 2015 the convertible promissory note and accrued interest totaling $257,400 was converted into approximately 514,800 shares on common stock in accordance with the terms on the original convertible note.

 

 

Debt as of December 31, 2014 and 2013 was comprised of the following:

 

    2014     2013  
             
June 2011 Note  (See above)   $ 68,000     $ 68,000  
                 
Note payable dated February 2012, interest at 5% per annum, $112,500 is due December 31, 2014, convertible in whole or in part to common stock at $.50 per share. (see Note 18)       225,000         225,000  
                 
Promissory note dated December 2009, unsecured, bearing interest at 6% per annum, six monthly payments ranging from $10,000 to $25,000 commencing February 2010, balloon payment for outstanding balance due July 2010. The promissory note was in default as of December 31, 2013 and was paid in full January 2014.         —           104,200  
                 
Capital lease obligations, secured by certain assets, maturing September 2011 through August 2016     130,900       155,600  
     Total notes payable and capital lease obligations     423,900       552,800  
                 
     Less:  current portion, including debt discount     (363,000 )     (504,700 )
     Notes payable and capital lease obligations, long-term   $ 60,900     $ 48,100  

 

Debt maturities as of December 31, 2014 are as follows:

 

Year:      
2015   $ 363,000  
2016     27,000  
2017     33,900  
    $ 423,900  

 

Future minimum lease payments under capital leases, which include bargain purchase options, are as follows at December 31, 2014:

 

2015   $ 82,800  
2016     30,300  
2017     35,400  
Total minimum lease payments     148,500  
Amount representing interest     (17,600 )
Present value of lease payments     130,900  
Less current portion     (70,000 )
Non-current portion   $ 60,900