Quarterly report pursuant to Section 13 or 15(d)

LONG-TERM DEBT AND NOTES PAYABLE (Details)

v2.4.0.8
LONG-TERM DEBT AND NOTES PAYABLE (Details) (USD $)
Jun. 30, 2014
Dec. 31, 2013
Short-term Debt [Line Items]    
Total Long-term Debt $ 2,140,453 $ 1,234,360
Current portion of long-term debt 1,959,579 835,454
Long-term debt, less current portion 180,874 398,906
Bank Overdrafts [Member]
    
Short-term Debt [Line Items]    
Total Long-term Debt 132,930 79,372
Notes Payable to Bank One [Member]
    
Short-term Debt [Line Items]    
Total Long-term Debt 197,416 [1] 218,119 [1]
Line of Credit [Member]
    
Short-term Debt [Line Items]    
Total Long-term Debt 500,000 [2] 472,000 [2]
Notes Payable to Bank Two [Member]
    
Short-term Debt [Line Items]    
Total Long-term Debt 500,088 [3] 0 [3]
Notes Payable To Bank Three [Member]
    
Short-term Debt [Line Items]    
Total Long-term Debt 10,249 [4] 38,614 [4]
Loan Agreement Two [Member]
    
Short-term Debt [Line Items]    
Total Long-term Debt 100,000 [5] 0 [5]
Term Facility One [Member]
    
Short-term Debt [Line Items]    
Total Long-term Debt 112,291 133,448
Term Facility Two [Member]
    
Short-term Debt [Line Items]    
Total Long-term Debt 330,220 [6] 0 [6]
Loan Agreement One [Member]
    
Short-term Debt [Line Items]    
Total Long-term Debt 125,000 [7] 150,000 [7]
Term Facility Three [Member]
    
Short-term Debt [Line Items]    
Total Long-term Debt $ 132,259 $ 142,807
[1] On April 11, 2013, the Company and Paragon Commercial Bank (“Paragon”) entered into a credit agreement (the “Credit Agreement”).
[2] The Credit Agreement provides for an additional $500,000 revolving credit facility with a one-year term from the closing date. The Credit Agreement is available to be drawn at the Company’s discretion to finance investments in new business ventures and for the Company’s general corporate working capital requirements in the ordinary course of business. The note payable originally matured on August 10, 2013 and on November 4, 2013 the note was extended to October 10, 2018 with monthly principal and interest payments of $4,406, whereas the new credit facility (b) expired on August 10, 2014. Borrowings under the Credit Agreement bear monthly interest at the greater of: (i) floor rate of 5.00% or (ii) the Wall Street Journal’s prime plus rate (3.25% as of June 30, 2014) plus 1.00%. All unpaid principal and interest are due one (1) year after the closing date. Any borrowings are secured by a lien on all of the Company’s assets. The obligations under the Credit Agreement are guaranteed by Mike Pruitt, the Company’s Chief Executive Officer.
[3] In addition, in February 2014 the Company secured a note with Paragon for $500,088 due on August 10, 2014. The note bears interest at a 5% annual rate, payments of interest only are due monthly until the due date.
[4] ARB entered into a term note with TD Bank in 2008 for $300,000, which has a balance of $10,249 at June 30, 2014 and has a maturity date of August 4, 2014. The interest rate is 1.75% above the Wall Street Journal prime rate (3.25%), and the monthly principal and interest payment is $4,836, subject to adjustment by TD Bank, except for the last payment which shall be the unpaid balance at maturity. The term note is personally guaranteed by two former shareholders of ARB, and TD Bank has a first lien on all ARB’s assets.
[5] On June 20, 2014, the Company entered into a loan agreement with an outside company for $100,000, due on July 11, 2014. Interest is at an 8% annual rate. The Company is currently negotiating with the lender to extend the above debt. The lender has not issued a formal notice of default to the Company.
[6] 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 is 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 of approximately $4,600 commence in August, 2014. The mortgage note is personally guaranteed by our CEO and South African COO and secured by the assets of the Port Elizabeth building.
[7] On December 23, 2013, the Company entered into a loan agreement with an outside company for $150,000, due on February 23, 2014. Interest is compounded monthly at a rate of 1%. As of February 23, 2014, the Company was not in compliance with the terms of this note due to non-payment of principal and interest. On March 21, 2014, the Company paid the note holder $25,000 of principal and $4,751 of accrued interest. However, the note holder has not issued a formal notice of default to the Company.