Quarterly report pursuant to Section 13 or 15(d)

Short Term Debt

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Short Term Debt
9 Months Ended
Sep. 30, 2015
Debt Disclosure [Abstract]  
Short Term Debt

NOTE 10 – SHORT TERM DEBT

 

Short term debt consisted of the following:

 

    September 30, 2015     December 31, 2014  
Short term debt                
Revolving line of credit   $ 1,999,084     $ 1,991,605  
2012 and 2013 notes payable to individuals     260,000       285,000  
April 2014 note payable to an individual     200,000       200,000  
April 2015 note payable to an individual     50,000       -  
    $ 2,509,084     $ 2,476,605  

 

Interest expense for the short term debt for the nine months ended September 30, 2015 and 2014 is summarized as follows:

 

    Nine months ended     Nine months ended  
    September 30, 2015     September 30, 2014  
Interest expense on short term debt                
Revolving line of credit   $ 66,562     $ 51,468  
2012 and 2013 notes payable to individuals     15,933       16,793  
April 2014 note payable to an individual     11,967       -  
April 2015 note payable to an individual     2,315       -  
    $ 96,777     $ 68,261  

 

Revolving Line of Credit

 

On February 25, 2013, the Company entered into a working capital revolving line of credit with a bank, with a credit limit of $500,000 which was increased to $2 million when the line was renewed on June 26, 2014. The line is used in financing overseas sales of the Company’s products. The Company’s draws under the line are transaction specific and are guaranteed by the Export Import Bank, a U.S. government entity. The line is secured by a perfected first security interest on all of the Company assets.

  

Drawdowns on the line are used to meet the working capital needs of the Company to purchase materials and fund the labor and overhead to manufacture specific products for export to specific customers. The current line, which accrues interest at a fixed rate of 6.0%, was set to expire on June 26, 2015, but was extended until October 26, 2015, and has a total credit limit of $2,000,000. The loan expired on October 26, 2015 and the lender and the Company are in discussions to renew the loan. The lender has not communicated to the Company that the loan is in default or called the loan as of the date of this filing. As the line of credit’s maturity date has passed, the debt has been classified as current on the accompanying Consolidated Balance Sheet. The loan is guaranteed by the Company’s President.

 

For the nine months ended September 30, 2015 and 2014, there were total draws on the line of credit of $1,070,000 and $2,045,000, respectively, and repayments of approximately $1,062,000 and $695,000 respectively.

 

2012 and 2013 short term notes to individuals

 

During 2013 and 2012, the Company entered into other various notes with individuals totaling $300,000, at interest rates ranging from 5% to 18%, which are due on demand. During the nine months ended September 30, 2015 and 2014, the Company repaid $25,000 and $0, respectively, on these various notes.

 

April 2014 short term note payable to an individual

 

On April 15, 2014, the Company entered into a note payable for $200,000 with a term of one year and interest accruing at a rate of 8%, which is accruing and due in full at the end of the term of the note. The note was not repaid on April 15, 2015, instead the terms were amended, making this obligation due on demand.

 

April 2015 short term note payable to an individual

 

In April 2015, the Company entered into a $50,000 note payable with an individual at an interest of 10% and due on demand.