XML 17 R28.htm IDEA: XBRL DOCUMENT v3.3.0.814
6. Debt - Debt (Details) - USD ($)
Sep. 30, 2015
Dec. 31, 2014
Debt Disclosure [Abstract]    
Line of credit [1] $ 47,000 $ 47,000
Note payable to distribution partner [2] 550,000 580,000
Investor debt [3] 267,787 267,787
Related party debt [4] 5,340,709 3,840,749
Other notes payable [5] 68,952 57,692
Cash draw agreements [6] 146,432 255,793
Convertible promissory notes [7] 188,684 217,500
Total 6,609,564 $ 5,266,521
Less: unamortized discount (145,415)
Debt, net of unamortized discount 6,464,149 $ 5,266,521
Less: current portion (4,529,439) (2,373,307)
Debt, long-term portion $ 1,934,710 $ 2,893,214
[1] A - Line of Credit - We utilized this entire bank line of credit for working capital purposes. The outstanding obligation is due on demand, has a stated initial interest rate of 10.5% that is subject to adjustment, and is guaranteed by our majority shareholder/CEO. Energie and our CEO were served with a summons and complaint, wherein the bank brought an action to collect the amount due, including interest, costs and attorney's fees. We have filed a response to the complaint and are engaged in settlement discussions with the bank. Accordingly, the amounts due are classified as current liabilities in the accompanying condensed, consolidated balance sheets.
[2] B - Note payable to distribution partner - Note payable to a significant European distribution partner, entered into in October 2014, bearing interest at 5% payable quarterly, with principal payable monthly through September 2019. The 2014 note payable aggregated the 2007 promissory note, accrued interest and accounts payable.
[3] C - Investor Debt - Notes payable to lenders having an ownership interest in Holdings at September 30, 2015 and December 31, 2014. These loans are not collateralized. The following summarizes the terms and balances of the investor debt:
[4] D - Related Parties Debt - The following summarizes notes payable to related parties:
[5] E - Other Notes Payable - Represents the outstanding principal balance on two separate notes bearing interest at approximately 12% annually. In the event we receive proceeds as the beneficiary of a life insurance policy covering our majority shareholder/CEO, repayment of principal and interest is due on these notes prior to using the proceeds for any other purpose.
[6] F - Cash draw agreements - Under these agreements, the lender advances us the principal balance and then automatically withdraws a stated amount each business day. Accordingly, there is no stated interest rate. The total remaining daily payments due under these arrangements was $194,170 as of September 30, 2015. The maturity dates of the agreements range from October 2015 to February 2016.
[7] G - Convertible promissory notes - Represents the outstanding principal balance on two separate convertible promissory notes payable to an entity with interest of 8% annually, due in August 2016. During the third quarter of 2015, the current holder of the notes purchased all of our similar outstanding convertible notes from another entity and consolidated those notes into two new notes. At the option of the holder, the notes may be settled in cash or converted into shares of our common stock at any time beginning 180 days from the date of the notes at a price equal to 61% of the average closing bid price of our common stock during the 10 trading days immediately preceding the date of conversion. In the event we fail to pay the notes when they become due, the balance due under the notes incurs interest at the rate of 22% per annum. The notes contain additional terms and conditions normally included in instruments of this kind, including a right of first refusal wherein we have granted the holders the right to match the terms of any future financing in which we engage on the same terms and contemplated in such future financing. We estimate that the fair value of the conversion feature is minimal, so no value has been assigned to the beneficial conversion feature. During the nine months ended September 30, 2015, $95,395 of principal and $3,912 of interest was converted into 34,768,112 shares of common stock.