XML 41 R11.htm IDEA: XBRL DOCUMENT v2.4.0.6
Notes to Related Parties
9 Months Ended
Sep. 30, 2012
Due from Related Parties, Unclassified [Abstract]  
Notes to Related Parties

6.         Notes to Related Parties

 

Subordinated Convertible Notes Payable

 

Notes payable to related parties includes unsecured convertible notes to UBA of a total value, including interest at the prime rate plus 1.5%, but not to exceed 10% per year, of $3,384,000 as of September 30, 2012. Thirteen of the UBA notes are convertible into shares of the Company’s common stock at a conversion price of $1.50 per share and one UBA note is convertible into shares of the Company’s common stock at a conversion price of $1.44 per share. The issuance of shares of the Company’s common stock to non-employee directors on September 14, 2011 triggered an adjustment to the conversion price with respect to the UBA note that now converts at a conversion price of $1.44 per share from $1.50 per share to $1.44 per share. As of September 30, 2012, the outstanding principal and interest on the notes issued to UBA were convertible into 2,272,681 shares of the Company’s common stock.

 

The UBA notes were automatically extended until June 2012 with automatic renewals after such maturity date for successive one year terms, provided that either the Company or UBA may elect not to extend the term upon written notice given to the other party no more than 60 days and no fewer than 30 days prior to the expiration of the applicable term. Under the terms of the UBA notes, UBA may demand payment within 60 days following the end of the extension period, but UBA has agreed to subordinate the UBA notes to the Company’s long-term debt agreements with Cole Taylor. Therefore, the Company will not require the use of working capital to repay any of the UBA notes until the Cole Taylor facilities are repaid. The UBA notes include $1,468,600 and $1,400,300 of accrued interest at September 30, 2012 and December 31, 2011, respectively.

 

5% Notes Payable

 

Included in current maturities of notes payable to related parties as of December 31, 2011 was $93,200 related to a note bearing annual interest at 5% issued by Shepherd Neame in favor of KBEL, which was paid in full as of June 30, 2012.