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CONVERTIBLE DEBT OBLIGATIONS
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Dec. 31, 2014
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| Convertible Debt [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Convertible Debt Disclosure [Text Block] |
Convertible notes consist of the following:
[1] Accrued interest is included as a component of accrued expenses on the consolidated balance sheets.
The non-current portion of the above amounts represents principal and accrued interest that was subsequently exchanged for equity securities prior to the release of the financial statements.
8% Convertible Notes
During an offering that commenced on September 8, 2009 and ultimately ended on September 30, 2010, IPG issued convertible notes with an interest rate of 8% and an amended maturity date of March 31, 2011 (the “8% Notes”) for gross proceeds of $13,238,120. Principal and accrued interest was contingently convertible, on an all-or-none basis, at the option of the holder (1) just prior to the consummation of the IPG Exchange into IPG membership units (“IPG Units”) at an amended 22.5% discount to the conversion date fair market value; or (2) just prior to the consummation of a share exchange with a public company (or a similar transaction) into AWLD common stock (the “Go Public Transaction”) at an amended 20% discount to the conversion date fair market value. These notes are no longer convertible at the discretion of the holder.
The Company determined that the embedded conversion option (“ECO”) should not be bifurcated and accounted for as a derivative, primarily because the ECO’s, if freestanding, would not qualify as a derivative, on account of the fact that, at conversion settlement, the Company would not be delivering an asset that is readily convertible into cash.
On September 30, 2010, principal of $11,735,520 and accrued interest of $439,628 were converted into IPG Units, and the IPG Units were exchanged for shares of AWLD common stock. Through December 31, 2014, principal and accrued interest of $1,215,100 and $153,315, respectively, has been repaid in cash. As of December 31, 2014 and 2013, principal of $287,500 and $509,250, respectively, and accrued interest of $188,988 and $195,723, respectively, remained outstanding. The notes matured and are convertible at the option of the holder. After the maturity date, the interest continues to accrue for up to 12 months based on the interest rate stated above.
12.5% Convertible Notes
During an offering that commenced on June 24, 2011 and ultimately ended on October 31, 2011, AWLD issued convertible notes with an interest rate of 12.5% and an amended maturity date of August 29, 2012 (the “12.5% Notes”) for gross proceeds of $1,853,880. Principal and accrued interest was contingently convertible at the option of the holder (1) upon commencement of a $10,000,000 plus offering of preferred stock, on an all-or-none basis into such preferred stock at a 25% discount to the conversion date fair market value; or (2) after refusing the option to convert into preferred stock, into AWE land parcels at a 30% discount to the lesser of (i) the commitment date fair market value; or (ii) the conversion date fair market value. The contingent ECO’s expired at the August 29, 2012 maturity of the 12.5% Notes. These notes are no longer convertible at the discretion of the holder.
During 2013, pursuant to certain limited time offers, holders elected to exchange principal and interest of $350,000 and $90,328 into 249,289 shares of Series A preferred stock (“Series A Preferred”). The fair value of the equity securities issued exceeded the value of the extinguished debt by $133,035, which was recorded as a loss on extinguishment.
During 2014, pursuant to certain limited time offers, holders elected to exchange principal and interest of $86,500 and $51,321 into 92,811 shares of Series A Preferred. The fair value of the equity securities issued exceeded the value of the extinguished debt by $75,644, which was recorded as a loss on extinguishment.
Through December 31, 2014, principal and accrued interest of $163,500 and $15,730, respectively, has been repaid in cash, and principal and accrued interest of $1,640,380 and $317,791, respectively, was converted into shares of Series A Preferred. As of December 31, 2014 and 2013, principal of $50,000 and $140,500, respectively and accrued interest of $25,433 and $64,493, respectively, remained outstanding. The notes matured and are convertible at the option of the holder. After the maturity date, the interest continues to accrue for up to 12 months based on the interest rate stated above.
10% Convertible Notes
During an offering that commenced on November 1, 2011 and ultimately ended on June 15, 2012, AWLD issued convertible notes with an interest rate of 10% and an amended maturity date of August 29, 2012 (the “10% Notes”) for gross proceeds of $6,711,820. Principal and accrued interest was contingently convertible at the option of the holder (1) upon commencement of a $10,000,000 plus offering of preferred stock, on an all-or-none basis into such preferred stock at a 20% discount to the conversion date fair market value; or (2) after refusing the option to convert into preferred stock, into AWE land parcels at a 25% discount to the lesser of (i) the commitment date fair market value; or (ii) the conversion date fair market value. The contingent ECO’s expired at the August 29, 2012 maturity of the 10% Notes.
10% Convertible Notes, continued
During 2013, pursuant to certain limited time offers, holders elected to exchange principal and interest of $913,000 and $96,827 for 545,788 shares of Series A Preferred. The fair value of the equity securities issued exceeded the value of the extinguished debt by $245,488, which was recorded as a loss on extinguishment.
During 2014, pursuant to certain limited time offers, holders elected to exchange principal and interest of $726,381 and $12,708 for 384,161 shares of Series A Preferred. The fair value of the equity securities issued exceeded the value of the extinguished debt by $144,482, which was recorded as a loss on extinguishment.
Through December 31, 2014, principal and accrued interest of $523,773 and $287,474, respectively, has been repaid in cash, and principal and interest of $6,188,047 and $417,846, respectively, was converted into shares of Series A Preferred. No principal or interest remained outstanding related to the 10% Convertible Notes as of December 31, 2014.
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