Annual report pursuant to Section 13 and 15(d)

NOTES PAYABLE

v3.3.1.900
NOTES PAYABLE
12 Months Ended
Dec. 31, 2015
Debt Disclosure [Abstract]  
NOTES PAYABLE

NOTE 11. NOTES PAYABLE

Notes payable consisted of the following at December 31, 2015 and 2014:

 

 

 

2015

 

 

2014

 

PTG notes payable, net of discount

 

$

10,934,544

 

 

$

14,385,643

 

Carpathia Associates note payable (related party)

 

 

579,083

 

 

 

1,065,324

 

Robert Saucier note payable (related party)

 

 

500,000

 

 

 

 

Vehicles, notes payable

 

 

70,664

 

 

 

86,364

 

 

 

 

12,084,291

 

 

 

15,537,331

 

Less: current portion

 

 

(4,648,120

)

 

 

(3,480,864

)

Total long-term debt

 

$

7,436,171

 

 

$

12,056,467

 

 

The Carpathia note payable is a related party note as a result of the asset purchase agreement with GGLLC.  The note payable originally required monthly principal and interest payments of $9,159, at a fixed interest rate of 7.3% through February 2017, at which time there was a balloon payment due of $1,003,000.  The note payable between GGLLC and Bank of America was the subject of litigation and was settled in February 2014. See Note 12 for further details regarding the litigation.  On August 10, 2015, our Board of Directors approved an agreement of offset between the Company and Carpathia which amends the terms of the note receivable and note payable previously entered into.  See Note 3 for further details regarding the offset.

On October 26, 2015, we entered into a note payable with Mr. Saucier our CEO.  We agreed to repay a loan of $500,000 made by Mr. Saucier to the Company.  Under the terms of the note payable, $590,000 shall be due on or before October 26, 2016, unless we pay Mr. Saucier $535,000 on or before April 26, 2016, in which case we will have fulfilled all of our obligations under the note.  The note payable is unsecured.

In October 2011, we closed an asset acquisition with Prime Table Games (“PTG Assets”). Included within the structure of the $23 million acquisition was a $22.2 million component consisting of two promissory notes: 1) a note payable for $12.2 million, and 2) a note payable for £6.4 million (GBP). The fair value of the notes, net of the debt discount, was $20,670,000 at the time of issuance. The note terms are summarized as follows:

 

 

 

Monthly Payment Amounts

 

 

 

 

 

 

 

Prime Table Games, LLC

 

 

Prime Table Games UK

 

 

 

 

 

Payment Year

 

(in USD)

 

 

(in GBP)

 

 

Interest Rate

 

2012

 

$

100,000

 

 

£

64,000

 

 

 

3

%

2013

 

 

130,000

 

 

 

76,800

 

 

 

4

%

2014

 

 

160,000

 

 

 

89,600

 

 

 

5

%

2015

 

 

190,000

 

 

 

102,400

 

 

 

6

%

2016

 

 

220,000

 

 

 

115,200

 

 

 

7

%

2017

 

 

220,000

 

 

 

115,200

 

 

 

8

%

2018

 

 

220,000

 

 

 

115,200

 

 

 

9

%

 

In the event future monthly revenue received by us from the PTG Assets is less than 90% of the notes monthly payment due to Prime Table Games, then the note payments at our option, may be adjusted to the higher of $100,000 per month (for Prime Table Games, LLC) and £64,000 per month (for Prime Table Games UK) or 90% of the monthly revenue amount generated from the PTG Assets. If we engage in this payment adjustment election, the note shall not be deemed in default and the interest rate of the note will increase 2% per annum for the duration of the note or until the standard payment schedule resumes.

The notes are collateralized by the all of the assets acquired from Prime Table Games LLC and Prime Table Games UK.

Maturities of our notes payable as of December 31, 2015 are as follows:

 

Maturities as of:

 

Total

 

2016

 

$

4,648,120

 

2017

 

 

4,370,645

 

2018

 

 

3,689,905

 

2019

 

 

18,934

 

2020

 

 

 

Total long term debt

 

$

12,727,604

 

Less: debt discount

 

 

(643,313

)

Long-term debt, net of debt discount

 

$

12,084,291