Subordinated Notes Payable

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Subordinated Notes Payable

NOTE 12 – SUBORDINATED NOTES PAYABLE

Notes and loans payable consisted of the following:

	March 31, 2016			December 31, 2015
Note payable - acquisition of Quest	$	6,577,509		$	6,577,509
Note payable – acquisition of BCS		10,348,808			10,348,808
Note payable – acquisition of ViascanQdata		2,359,006			2,446,969
Note payable – License contingent liability		150,000			150,000
Shareholder note payable		778,829			720,600
Quest Preferred Stock note payable		3,120,0000			3,120,000
Total notes payable		24,106,719			23,363,886
Less: debt discount		(2,106,298	)		(2,306,298	)
Less: current portion		(8,564,275	)		(7,146,820	)
Total long-term notes payable	$	13,436,146		$	13,910,768

As of March 31, 2016 and December 31, 2015, the Company recorded interest expense in connection with these notes in the amount of $216,770 and $177,774, respectively.

The note payable for acquisition of Quest was issued on January 9, 2014 in conjunction with the acquisition of Quest Marketing, Inc. The current interest is at 1.89%, subsequent to December 31, 2015, the interest was increased to 6% and is due in 2017. Principal payments have been postponed.

The note payable for acquisition of BCS was issued on November 21, 2014 in conjunction with the acquisition of BCS. The current interest is at 1.89% and is due in 2018. This note is convertible at $2.00 per share, subject to board approval such that no debt holder can own more than 5% of the outstanding shares. Principal payments have been postponed.

The note payable in relation to the acquisition of ViascanQdata was issued effective October 1, 2015. $1,500,000 of the note was issued to Viascan Group, a related party due to the ownership interest of our CEO and head of Media Sales (the former owners of ViascanQData). The interest rate is 6% on this note with payments due in 2016 and 2018. The balance are debts assumed by the Company on the transaction. Principal payments have been postponed.

The Company has a contingent liability of $150,000 in connection with the acquisition of technology licenses in 2015. This payment becomes due when the respective technology becomes operable and viable. As of the date of this filing, it is unknown when that will become due.

The shareholder note in conjunction with the amounts owed to the former owner of ViascanQData. This note bears interest at 6%. Principal payments have been postponed.

The Quest preferred stock 6% note payable is in conjunction with the promissory note issued in October 2015 related to the redemption and cancelation of 100% of the issued and outstanding Series A preferred stock as well as 3,400,000 stock options that had been issued to an employee. The principal payments have been postponed.

Subsequent to the acquisition of Quest Marketing, the Company engaged an independent valuation analysis to do a valuation of the purchase accounting. During this process, it was determined a debt discount of $4,000,000 (original issue discount, OID) should be assigned to the promissory note. That debt discount is being accreted over the term of the 5 years at $200,000 per quarter.

Future expected maturities of subordinated notes payable at March 31, 2016 is as follows:

2017	$	3,380,693
2018		9,988,672
2019		854,932
2020		522,000
Total	$	14,746,297

As of March 31, 2016 and December 31, 2015, the Company recorded interest expense in connection with these notes in the amount of $223,305 and $1,157,842, respectively.