NOTE 11. NOTES PAYABLE

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

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:

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: