Annual report pursuant to Section 13 and 15(d)

Notes Payable and Interest Expense

v3.7.0.1
Notes Payable and Interest Expense
12 Months Ended
Dec. 31, 2016
Notes Payable and Interest Expense [Abstract]  
Notes Payable and Interest Expense

5. Notes Payable and Interest Expense



Notes Payable



The following table presents details of our notes payable as of December 31, 2016 and 2015:



 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

Facility

 

Maturity

 

Interest Rate

 

Balance at
December 31,
2016

 

Balance at
December 31,
2015

   BDC Term Loan

 

December 15, 2018

 

12% 

 

$

333,260 

 

$

 -

   ACOA Note

 

May 1, 2021

 

-

 

 

59,995 

 

 

 -

   SVB Working Capital Line of Credit Facility

 

March 30, 2018

 

Variable

 

 

979,821 

 

 

 -

Total Debt

 

 

 

 

 

 

1,373,076 

 

 

 -

Debt discount

 

 

 

 

 

 

21,003 

 

 

 

Less current portion

 

 

 

 

 

 

(1,032,913)

 

 

 -

Long-term debt, net of current portion

 

 

 

 

 

$

361,166 

 

$

 -



BDC Term Loan



On January 8, 2016, Livelenz (a wholly-owned subsidiary of the Company,) entered into an amendment of their original loan agreement dated August 26, 2011 with the Business Development Bank of Canada (“BDC”). Under this agreement the loan will mature, and the commitments will terminate on December 15, 2018. The company recorded $1,529 of debt issuance costs as part of the acquisition of  Livelenz. During the twelve months ended December 31, 2016, the company recorded $841 of amortization expense. As of December 31, 2016, the company has $824 of debt issuance costs remaining, which are being amortized on a straight-line basis to interest expense over the remaining term of the facility.



ACOA Note



On April 29, 2016, Livelenz (a wholly-owned subsidiary of the Company), entered into an amendment of the original agreement dated December 2, 2014 with the Atlantic Canada Opportunities Agency (“ACOA”). Under this agreement the note will mature, repayments began on June 1, 2016, and the commitments will terminate on May 1, 2021.  



SVB Working Capital Line of Credit Facility



In March 2016, we entered into a Working Capital Line of Credit Facility (the “Facility”) with Silicon Valley Bank (“SVB”) to provide up to $2 million to finance our general working capital needs. The Facility is funded based on cash on deposit balances and advances against our accounts receivable based on customer invoicing. Interest on Facility borrowings is calculated at rates between the prime rate minus 1.75% and prime rate plus 3.75% based on the borrowing base formula used at the time of borrowing. The Facility contains standard events of default, including payment defaults, breaches of representations, breaches of affirmative or negative covenants, and bankruptcy. During the twelve months ended December 31, 2016, the Company borrowed $1,000,000, under this facility.



Under the terms of the Facility, the Company is obligated to pay a commitment fee on the available unused amount of the Facility commitments equal to 0.5% per annum.



The Company capitalized debt issuance costs of $32,287 as of December 31, 2016 related to the Facility, which are being amortized on a straight-line basis to interest expense over the two-year term of the Facility. During the twelve months ended December 31, 2016, the company recorded $12,108 of amortization expense. As of December 31, 2016, the company has $20,179 of debt issuance costs remaining.



Interest Expense



The following table summarizes interest expense for the years ended December 31, 2016 and 2015:





 

 

 

 

 

 



 

 

 

 

 

 

 

 

December 31,

 

 

2016

 

2015

Interest expense

 

$

77,361 

 

$

847 

Total interest expense

 

$

77,361 

 

$

847