Notes Payable | (5) Notes Payable Notes payable at December 31, 2015 and December 31, 2014 as detailed below, is summarized as follows: December 31, 2015 December 31, 2014 Convertible promissory notes $ - $ 32,566 Convertible promissory notes accrued expenses 391,025 437,025 Revolving credit 190,232 226,789 Acquisition debt 30,000 30,000 Line of credit - 230,138 611,257 956,518 Less current maturities (611,257 ) (956,518 ) $ - $ - Convertible Promissory Notes On December 2, 2004, the Company entered into agreements to borrow an aggregate principal amount of $1,420,000 and to issue to the investors secured convertible notes and common stock purchase warrants. The Company's convertible promissory notes payable consist of the following at December 31, 2015 and December 31, 2014: December 31, 2015 December 31, 2014 Convertible promissory note, $50,000, issued December 2, 2004, due on November 30, 2009, 8% annual interest rate - 17,325 Convertible promissory note, $50,000, issued December 2, 2004, due on November 30, 2009, 8% interest rate - 15,241 - 32,566 Less: current maturities - (32,566 ) $ - $ - At December 31, 2014, there were no warrants outstanding and exercisable associated with the 2004 debt. Loan payable principal stockholder In the first quarter of 2014, the Company's principal (Canadian) stockholder advanced the Company $140,000 in anticipation of converting warrants to purchase additional shares at $.009 per share. On September 2, 2014, an exercise of warrants was executed and the $140,000 was included in the total amount due to the principal (Canadian) stockholder of $302,474 that was converted into 33,608,200 shares of BlastGard International's Common Stock. The balance of loans payable to the principal stockholder as of December 31, 2015 is $0. Conversion of Accrued Expenses. On March 8, 2011, BlastGard's Board of Directors ratified, adopted and approved that James F. Gordon's accrued salary of $160,000 (20 months at $8,000 per month covering May-December 2009, January-October 2010 and January-February 2011); Michael J. Gordon's accrued salary of $160,000 (20 months at $8,000 per month covering May-December 2009, January-October 2010 and January-February 2011); and Morse & Morse, PLLC's accrued legal bill of $67,025 be converted into a Convertible Non-Interest Bearing Demand Note, convertible into Common Shares of BlastGard at $.05 per share at the noteholder(s) discretion. On May 3, 2011, BlastGard's Board of Directors ratified, adopted and approved $100,000 in additional compensation to Michael J. Gordon as CEO, of which $50,000 be converted into a Convertible Non-Interest Bearing Demand Note, convertible into Common Shares of BlastGard at $.05 per share at the noteholder(s) discretion and $50,000 issued in Common Stock at $.05 per share. On November 11, 2013, the Board of Directors approved the lowering the conversion price for $.05 per share to $.01 per share on these notes. The 2011 convertible promissory notes consisted of the following at December 31, 2015 and December 31, 2014: December 31, 2015 December 31, 2014 Convertible promissory note, $210,000, issued January 31, 2011, due on September 30, 2011, 6% interest rate $ 180,000 $ 210,000 Convertible promissory note, $160,000, issued January 31, 2011, due on January 31, 2012, 6% interest rate 144,000 160,000 Convertible promissory note, $67,025, issued January 31, 2011, due on September 30, 2011, 6% interest rate 67,025 67,025 391,025 437,025 Less: current maturities (391,025 ) (437,025 ) $ - $ - See "Note 11" regarding the conversion of $300,000 of the aforementioned Notes into 30,000,000 shares of Common Stock in January 2016. This $300,000 is accounted for as a non-current liability due to being satisfied through the issuance of equity. The Company had issued 104,333,335 warrants with the convertible debt. The 41,801,793 warrants which remain outstanding are currently exercisable at $0.009 and expire in 2018. Due to changes in the terms, the warrants are re-valued, using the Black-Scholes method each quarter. On August 23, 2013, 28,923,342 warrants were exercised and on September 2, 2014, 33,608,200 warrants were exercised. At December 31, 2015 the remaining 41,801,793 warrants were valued at approximately $357,449, with an unamortized debt discount of $336,707, and a net value of $20,742. These amounts are presented as a derivative liability, net on the balance sheet. Revolving Credit Facilities The Company also acquired various revolving credit facilities in the acquisition of HighCom Security, Inc. HighCom had been paying interest only on the loans. The revolving credit facilities consist of the following at December 31, 2015 and December 31, 2014: December 31, 2015 December 31, 2014 Line of credit from Regions Bank, $100,000, interest only at 8% annually, due on demand $ 53,649 $ 63,940 Revolving credit card facility with Wells Fargo Bank, $150,000, interest only at 7.5% annually, due on demand 136,583 142,582 Three credit card accounts with major financial institutions varying monthly minimum payments including interest, due on demand 0 20,267 190,232 226,789 Less: current maturities (190,232 ) (226,789 ) $ - $ - Acquisition Debt On March 4, 2011, the Company issued a note payable in association with the purchase of HighCom Security Inc. and on March 31, 2011, the Company issued a note payable in association with the purchase of Acer product designs. These acquisition notes have the following balances at December 31, 2015 and December 31, 2014: December 31, 2015 December 31, 2014 Acquisition note for the purchase of Acer product designs, original amount $30,000, no interest 30,000 30,000 30,000 30,000 Less: current maturities (30,000 ) (30,000 ) $ - $ - Line of Credit The Company has a $100,000 credit line, which was secured by a personal guarantee of its Chief Executive Officer and a $220,000 credit line secured by a personal guarantee of its Chief Executive Officer. As of December 31, 2015 and December 31, 2014, $0 and $230,138 was borrowed and advanced to the Company. These loans are included in the current portion of notes payable. Off Balance Sheet Arrangements We currently have no off-balance sheet arrangements. Canadian corporation has the right to nominate and appoint at least 50% of the Board Members. In 2013, in connection with 8464091 Canada Inc. acquiring over majority control of the Company's Common Stock from a former affiliated third party, the Company agreed that the Canadian corporation has the right to nominate and appoint to the Board at least 50% of the Board members. Also, the Canadian corporation has the right to participate in future financings up to its pro rata share of Common Stock of the Company. |