Other Liabilities

12 Months Ended

Dec. 31, 2016

Other Liabilities Disclosure [Abstract]

Other Liabilities

NOTE 11 – OTHER LIABILITIES

At December 31, 2016 and 2015, other liabilities consisted of the following:

	2016			2015
Unearned Incentive from credit Cards	$	123,105		$	100,000
Key Man life Insurance liability		208,091			92,776
Dividend payable		101,075			-
Others		127,931			448,735
		560,202			641,511
Less Current Portion		(227,932	)		(369,609	)
Total long term other liabilities	$	332,270		$	271,902

The Company has purchased key man life insurance policies for some of its executives to insure the Company against risk of loss of an executive. Should loss of an executive occur, those funds would be used to pay off their respective promissory notes, repurchase their shares and settle out any amounts owed to them and their estate.

At December 31, 2016, the balance of amount of premium financed note are $2,388,148 and the cash value of the policy as of this date is $2,208,750, with a net negative cash value of the policies of $179,398.

On, June 10, 2016, the Company entered into an assignment and assumption with three of the beneficiaries of the key man insurance policies. The agreement states that the Company will be assigning the policy over to the beneficiary and the beneficiary will assume all the obligations under the premium financed note in place. The premium financed note has to be bifurcated with the lender in order to complete the transaction.

The value of the policies is recorded at the new value per the right of offset noted in Topics 210-220. To have right of offset, the Company would need to show (1) amounts of debt are determinable, (2) reporting entity has the ‘right’ to setoff, (3) the right is enforceable by law, and (4) reporting entity has the ‘intention’ to setoff. Given that the Company has met all of these, the Company has elected to use the right of setoff as the cash value of the policies is being used as the collateral for the loans. Should the Company default on payments to the policy or determine to not continue with the policies, the cash value of the policy is intended to pay off of the loan. The Company also intends to settle out the loans in the future with the cash value of the policy.