Notes Payable, Long-Term Debt and Other Financing

9 Months Ended

Sep. 30, 2013

Notes to Financial Statements

Notes Payable, Long-Term Debt and Other Financing

Notes payable consisted of the following at:

	September 30, 2013			December 31, 2012
Secured note payable to Credit Managers Association of California, bearing interest at prime plus 3% (6.25% as of September 30, 2013), and is adjusted annually in April through maturity. Principal and unpaid interest due in April 2016. A sinking fund escrow may be funded with 10% of future equity financing, as defined in the Agreement	$	1,238,000		$	1,238,000
Secured note payable to a Coca Cola Enterprises in the original amount of $40,000, bearing interest at 10% per annum. Principal and unpaid interest due on demand		40,000			40,000
Secured note payable to a financial institution in the original amount of $38,000, bearing interest at 8.25% per annum, payable in 60 equal monthly installments of principal and interest through February 19, 2014		5,000			11,000
Secured note payable to a financial institution in the original amount of $19,000, bearing interest at 10.50% per annum, payable in 60 equal monthly installments of principal and interest through August 25, 2014		5,000			8,000
Secured note payable to a financial institution in the original amount of $26,000, bearing interest at 7.91% per annum, payable in 60 equal monthly installments of principal and interest through April 9, 2015		9,000			14,000
Secured note payable to a financial institution in the original amount of $25,000, bearing interest at 7.24% per annum, payable in 60 equal monthly installments of principal and interest through March 10, 2016		-			17,000
		1,297,000			1,328,000
Less current portion of notes payable		(56,000	)		(66,000	)
Notes payable, net of current portion	$	1,241,000		$	1,262,000

As of September 30, 2013 and December 31, 2012, the balance of long term interest payable amounted to $1,380,000 and $1,318,000, respectively, of which the Credit Managers Association of California note amounted to $1,344,000 and $1,286,000, respectively. Interest expense on notes payable amounted to $64,000 and $65,000 during the nine months ended September 30, 2013 and 2012, respectively.  Interest expense on notes payable amounted to $21,000 and $24,000 during the three months ended September 30, 2013 and 20112, respectively.  In June 2013, the vehicle that secured the note payable due March 10, 2016 was repossessed by the secured lender. The Company was invoiced by the lender for $8,000 for final settlement.