Long-Term Debt

3 Months Ended

Mar. 31, 2018

3.	LONG-TERM DEBT

Long-term debt consists of the following:

	March 31, 2018			December 31, 2017
Senior Secured Notes, due June 30, 2018 (discount is based on imputed interest rate of 26%)	$	5,750,000		$	5,750,000
Less: unamortized discount and debt issuance costs on Senior Secured Notes		(493,750	)		(987,500	)
Net Senior Secured Notes		5,256,250			4,762,500
Secured mortgage payable to Bank for the purchase of the 100 Commerce Drive Building due in monthly installments of $11,951.		1,732,354			1,741,378
Note payable, former building owner interest payment only due in monthly installments of $1,604 interest at 5.5%. A balloon payment of $350,000 plus unpaid interest due August 2018.		350,000			350,000

		7,338,604			6,853,878
Less current portion		5,637,996			5,143,997
Long term debt	$	1,700,608		$	1,709,881

On December 26, 2017, as part of its initial efforts to spin-off SureFly, the Company entered into a Securities Purchase Agreement with several existing institutional investors pursuant to which the company issued original issue discount Senior Secured Notes in the aggregate principal amount of $5,750,000 in consideration of gross proceeds of $5,000,000 paid by the Spin-Off Investors. The loan is convertible into SureFly equity upon achieving the spin-out.

Amortization expense related to the debt issuance costs and unamortized discounts for the Senior Secured Notes was $493,750 for the quarter ended March 31, 2018.