ACCOUNTS RECEIVABLE AND NOTES RECEIVABLE

Accounts receivable, net, consists of the following at December 31:



	2015			2014
Accounts receivable	$	8,280,749		$	10,253,663
Allowance for doubtful accounts	(1,965,335		)	(316,715		)
Accounts receivable, net	$	6,315,414		$	9,936,948

Accounts receivable represents amounts due from customers. Accounts receivable are recorded at invoiced amounts, net of reserves and allowances, and do not bear interest. The Company uses its best estimate to determine the required allowance for doubtful accounts based on a variety of factors, including the length of time receivables are past due, economic trends and conditions affecting its customer base, significant one-time events and historical write-off experience. Specific provisions are recorded for individual receivables when we become aware of a customer’s inability to meet its financial obligations. The Company reviews the adequacy of its reserves and allowances quarterly.

Receivable balances greater than 30 days past due are individually reviewed for collectability and if deemed uncollectible, are charged off against the allowance accounts after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any significant off balance sheet credit exposure related to its customers.

Notes receivable, net, consists of the following at December 31:



	2015			2014
Notes receivable (collateralized by invoiced accounts receivable)	$	5,346,452		$	4,846,452
Payments received and amounts written off	(3,654,790		)	—
Allowance for doubtful accounts	—			(1,696,452		)
Note receivable (collateralized by invoiced accounts receivable), net	$	1,691,662		$	3,150,000

The current notes receivable represents amounts due from Omega Holdings, LLC. Of the total notes receivable balance $1,691,662 represents invoiced amounts that do not bear interest as of December 31, 2015.

As of December 31, 2014, $3,150,000 of the current notes receivable balance represents short-term loans that carry an interest rate of 9.5% per annum. No accrued interest is included in the balance.

The remaining portion of the term notes receivable balance $8,308,000 at December 31, 2015 and December 31, 2014 also represent amounts due from Omega Holdings, LLC. The $8,308,000 balance was based on the purchase price allocated to the Nevada facility. The note carried an interest rate of 9.5% per annum and was collateralized by assets at the Nevada facility. The Company sold the Nevada facility in January, 2016 when the note was satisfied in full.

The accounts receivable and notes receivable balances of $1,691,662 and $8,308,000, respectively, were re-classified as "Assets held for sale" on the Balance Sheet at December 31, 2015.