Notes Payable | (5) Notes Payable Notes payable at March 31, 2016 and December 31, 2015 as detailed below, is summarized as follows: March 31, 2016 (unaudited) December 31, 2015 Convertible promissory notes accrued expenses - 391,025 Revolving credit 117,283 190,232 Acquisition debt 30,000 30,000 Notes payable - equipment 35,256 - 182,539 611,257 Less current maturities (177,838 ) (311,257 ) $ 4,701 $ 300,000 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. These notes were paid off in January 2016 through a conversion of $300,000 into 30,000,000 shares of Common Stock, and the balance being paid in cash. The 2011 convertible promissory notes consisted of the following at March 31, 2016 and December 31, 2015: March 31, 2016 December 31, 2015 Convertible promissory note, $210,000, issued January 31, 2011, due on September 30, 2011, 6% interest rate $ - $ 180,000 Convertible promissory note, $160,000, issued January 31, 2011, due on January 31, 2012, 6% interest rate - 144,000 Convertible promissory note, $67,025, issued January 31, 2011, due on September 30, 2011, 6% interest rate - 67,025 - 391,025 Less: current maturities - (91,025 ) $ - $ 300,000 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 March 31, 2016 the remaining 41,801,793 warrants were valued at approximately $353,247, with an unamortized debt discount of $307,414, and a net value of $45,833. 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 March 31, 2016 and December 31, 2015: March 31, 2016 December 31, 2015 Line of credit from Regions Bank, $100,000, interest only at 8% annually, due on demand $ - $ 53,649 Revolving credit card facility with Wells Fargo Bank, $150,000, interest only at 7.5% annually, due on demand, unsecured 117,283 136,583 117,283 190,232 Less: current maturities (117,283 ) (190,232 ) $ - $ - 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 March 31, 2016 and December 31, 2015: March 31, 2016 December 31, 2015 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 ) $ - $ - Note payable - Equipment The Company financed the acquisition of certain equipment through a promissory note. The note is payable in monthly installments of $2,350, is non-interest bearing, and has a maturity date of May 17, 2017. The note is secured by equipment. As of March 31, 2016 the balance of this note was $35,256. 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. Pursuant to this right, 8464091 Canada has nominated and the Board has appointed to the Board four members, which include, Paul Sparkes, Craig Campbell, Andrew Griffith and David Frum. Also, the Canadian corporation has the right to participate in future financings up to its pro rata share of Common Stock of the Company. |