Quarterly report pursuant to Section 13 or 15(d)

Long-Term Debt

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Long-Term Debt
 3 Months Ended
Mar. 31, 2018
Debt Disclosure [Abstract]  
LONG-TERM DEBT

3. LONG-TERM DEBT

 

Long-term debt consists of the following:

 

      March 31,
2018		     December 31,
2017		  
  Senior Secured Notes, due June 30, 2018 (discount is based on imputed interest rate of 26%)   $ 5,750,000     $ 5,750,000  
  Less: unamortized discount and debt issuance costs on Senior Secured Notes     (493,750 )     (987,500 )
  Net Senior Secured Notes     5,256,250       4,762,500  
  Secured mortgage payable to Bank for the purchase of the 100 Commerce Drive Building due in monthly installments of $11,951.     1,732,354       1,741,378  
  Note payable, former building owner interest payment only due in monthly installments of $1,604 interest at 5.5%. A balloon payment of $350,000 plus unpaid interest due August 2018.     350,000       350,000  
                   
        7,338,604       6,853,878  
  Less current portion     5,637,996       5,143,997  
  Long term debt   $ 1,700,608     $ 1,709,881  

 

On December 26, 2017, as part of its initial efforts to spin-off SureFly, the Company entered into a Securities Purchase Agreement with several existing institutional investors pursuant to which the company issued original issue discount Senior Secured Notes in the aggregate principal amount of $5,750,000 in consideration of gross proceeds of $5,000,000 paid by the Spin-Off Investors. The loan is convertible into SureFly equity upon achieving the spin-out.

 

Amortization expense related to the debt issuance costs and unamortized discounts for the Senior Secured Notes was $493,750 for the quarter ended March 31, 2018.