|9 Months Ended|
Aug. 31, 2015
|Debt Disclosure [Abstract]|
Note 12 – Note Payable
On June 30, 2015, the Company entered into a note payable in the amount of $1,300,000, in connection with the Asset Purchase Agreement (Note 8). The note is payable in 48 monthly installments of $29,938 including principal and interest at the rate of 5% per annum, commencing on July 31, 2015, and ending on June 30, 2019. The note is secured by all assets, inventory, molds, rights and contracts purchased pursuant to the Asset Purchase Agreement.
In the event the Company sells less than 8,000 PrepaCyte CB Processing System Units (“Units”) to outside customers during each of the twelve month periods during the note term beginning each July 1 and ending June 30, the note will be reduced by the lesser of $100,000 plus interest at the rate of 5% per annum or $25 times the difference between 8,000 and the actual number of Units sold plus interest at the rate of 5% per annum. Any annual note reduction shall serve to lower the remaining monthly note payments.
In addition, it is assumed that during the period from July 1, 2018 to June 30, 2019, the Company shall sell 4,000 Units and receive an additional $120,000 note reduction. However if the Company sells more than 4,000 Units, it will owe additional principal in the amount of $25 times the difference between 8,000 and the actual number of Units sold plus interest at the rate of 5% per annum, which is payable on June 30, 2019.
Maturities of the note payable subsequent to August 31, 2015 are as follows:
As of August 31, 2015, the Company has made two installments of $29,938 and recognized $10,731 of interest expense related to the note payable. The remaining principal balance of the note payable is $1,250,855 and is reflected on the accompanying balance sheets as of August 31, 2015.
The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.
Reference 1: http://www.xbrl.org/2003/role/presentationRef