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Subsequent Events
3 Months Ended
Mar. 31, 2014
Subsequent Events  
Note 10 - Subsequent Events

The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements, except as disclosed.

 

Notes Payable

 

On April 30, 2014, the Company received an additional $50,000 from a lender, which brought the face value of the Note to $750,000 pursuant to an Amended and Restated Promissory Note (the “April 2014 Note”), effective April 29, 2014, which supersedes the Note with the same Lender. The April 2014 Note contains financial covenants which require the Company to meet certain minimum targets for earnings before interest, taxes and non-cash expenses, including depreciation, amortization and stock-based compensation (“EBITDAS”) for the calendar quarters and years ended between June 30, 2014 and December 31, 2014. The remainder of the material April 2014 Note terms are unchanged from the Note, including the March 1, 2015 maturity date.  In consideration of the Lender providing additional funds and entering into the April 2014 Note, the Company granted the Lender a five-year warrant to purchase 75,000 shares of Common Stock at an exercise price of $0.35 per share. The warrant contains customary anti-dilution provisions. The warrant had a relative fair value of $14,900 which was set up as debt discount and will be amortized using the effective interest method over the term of the April 2014 Note.  Including the value of warrants issued in connection with the April Note, the Note had an effective interest rate of 40% per annum.


Executive Compensation

 

On April 28, 2014, the Compensation Committee approved the payment of an annual salary of $150,000 to the Company’s Chief Executive Officer, effective May 1, 2014.