Quarterly report pursuant to sections 13 or 15(d)

4. Notes Payable (Tables)

v2.4.0.8
4. Notes Payable (Tables)
 9 Months Ended
Sep. 30, 2013
Debt Disclosure [Abstract]  
Black-Scholes valuation for the warrants

The warrants were valued in the amount of $379,688, based on the Black-Scholes valuation using the following assumptions:

 

Risk-free interest rate 0.73%
Expected life in years 5
Dividend yield 0
Expected volatility 63.65%

 

Debt Discount for the convertible feature of the debenture was valued in the amount of $269,284 using the Black-Scholes calculation with the following assumptions:

 

Risk-free interest rate 0.31%
Expected life in years 2
Dividend yield 0
Expected volatility 60.01%

 

Debt Discount was recorded in the aggregate amount of $1,163,333 for the derivative value of the convertible feature of the reissued debenture on the exchange date using the Black-Scholes calculation with the following assumptions:

 

Risk-free interest rate 0.14%
Expected life in years .83
Dividend yield 0
Expected volatility 63.22%

 
Notes payable and accrued interest

As of September 30, 2013 and December 31, 2012, the Company had the following notes payable and accrued interest balances outstanding:

 

    9/30/2013     12/31/2012  
Debenture - $1,000,000 16% senior secured convertible   $ –     $ 1,000,000  
Debt Discount - $1,000,000 16% senior secured convertible     –       (485,147 )
Debenture - $1,163,333 16% senior secured convertible     1,088,333       –  
Debt Discount - $1,163,333 16% senior secured convertible     (979,499 )     –  
Notes Payable - 12% convertible     530,000       –  
Total Notes Payable     638,834       514,853  
Less:  Current Portion     638,834       –  
Long Term Portion   $ –     $ 514,853  
                 
Accrued Interest                
Debenture - $1,000,000 16% senior secured convertible Issued June 27,2012   $ 15,957     $ 26,667  
Debenture - $2,500,000 Terminated June 2009     19,049       19,049  
Notes Payable - $530,000 12% convertible Issued August 30, 2013     5,657       –  
Accrued Interest - Current Portion   $ 40,663     $ 45,716  
Schedule of Maturities of long-term debt

Maturities requirements on notes payable subject to mandatory redemption at September 30, 2013, are as follow:

 

  2013     $ 830,000  
  2014       788,333  
  2015       –  
  2016       –  
  2017       –  
  Total     $ 1,618,333