8. LONG-TERM DEBT AND NOTES PAYABLE

Long-term debt and notes payable are summarized as follows.

(a) The Company has a note payable of $5 million with Florida Mezzanine Fund. The note obligation was assumed in connection with Company’s acquisition of Hooter’s Australia, which the Company subsequently discontinued. The note, which bears interest at an annualized rate of 12%, was originally due and payable effective December 31, 2016. In connection with the Company’s agreement to conduct capital raise and apply a portion of the proceeds to the note, the lender has agreed to waive defaults and extend the note maturity by eighteen months. The Company is continuing to negotiate with the lender for changes to the current payment and other terms. While the lender has not demanded repayment, discussions are ongoing and it is unclear if the lender agrees that the Company met all terms of the extension as of December 31, 2016; therefore, the note continues to be reflected as a current liability on the December 31, 2016 balance sheet.

In connection with the payment of past due interest, the Company issued 562,900 shares of its common stock to the lender. Concurrently, the Company entered into a put agreement with Florida Mezzanine Fund during 2016 which provides the lender the right to require the Company to repurchase those shares at a price of $0.62 cents per share. This put right originally expired in January 2017 and was subsequently extended to March 31, 2017, and may likely be extended beyond that date in connection with other discussion with the lender. The shares subject to the repurchase obligation have been reflected as a redeemable temporary equity on the accompanying consolidated balance sheet as of December 31, 2016.

(b) The Company has a $1 million term note payable with Paragon Bank with a current balance of $0.7 million. The note bears interest at 5.0%, and is payable in monthly installments of principal and interest of $8,500 with a $392,325 balloon payment due at maturity. Paragon’s note is collateralized by substantially all of the Company’s assets and guaranteed by an officer of the Company. The notes matured in January 2017 and Paragon has extended the maturity through April 2017.

(c) The Company has a note payable with Paragon due on October 10, 2018, bearing interest at a 5% annual rate, with principal and interest monthly payments of $11,532. Paragon’s note is collateralized by substantially all of the Company’s assets and guaranteed by an officer of the Company.

(d) In April 2014, our South African subsidiary entered into a mortgage note with a South African bank for the purchase of the building in Port Elizabeth for our Hooters location. The 10-year note as originally entered into for $330,220 with an annual interest rate of 2.6% above the South African prime rate (prime currently 9.25%). Monthly principal and interest payments are approximately $4,600. The mortgage note is personally guaranteed by our CEO and South African COO and secured by the assets of the Port Elizabeth building.

(e) The Company’s South African subsidiary has local bank financing in the form of term and overdraft facilities, which are payable on demand and renew annually.

(f) The Company’s South African subsidiary has three local equipment financing arrangements in the form of term loans. The obligations bear interest at South African Prime plus 3.0% with monthly payments through maturity are various dates in 2018 and 2019.

(g) The Company entered into two Receivables Financing Agreements during 2016. During the third calendar quarter of 2016, in consideration for proceeds to the Company of $125,000, the Company agreed to remit a total of $156,250 from the merchant accounts of two of its restaurant locations directly to the lender over an estimated nine-month period. The daily amounts to be remitted to the lender, and the resulting term under which the borrowings will ultimately be outstanding, are based on remitting approximately 5% of the total daily credit card receipts of the two restaurant locations resulting the in $156,250 being paid in full approximately nine months from inception.

During the fourth quarter of 2016, in consideration for additional proceeds of $150,000, the Company added this amount to the aforementioned agreement and agreed to remit a total of $270,773 from the merchant accounts of one of its restaurant locations directly to a lender. The Company agreed to make payments of $1,547 per day for 175 business days.

The Company granted a security interest in the credit card receivables of the specified restaurants in connection with the Receivables Financing Agreements.