Debt

9 Months Ended

Sep. 30, 2015

4. Debt


	As of
	September 30, 2015			December 31, 2014
Long-term Debt
Note payable to CEO (the “Senior Note”); the Senior Note matures July 31, 2016. At September 30, 2015, the interest rate was 6.25%. This note is collateralized by all assets of the Company. See also Note 8, Related Party Transactions.		338,958			338,958
Total debt		338,958			338,958
Less current portion of long-term debt		(280,412	)		(152,952	)
Non-current portion of long-term debt	$	58,546		$	186,006

The Senior Note contains no restrictive covenants or events of default other than non-payment. On December 31, 2014, the Company did not make its regularly scheduled payment totaling $12,746 which constituted an event of default. Mr. Beck did not call default but there can be no assurance that, as the Company’s senior secured lender, he will not do so. It is anticipated that the Company will amend the Senior Note at some future point but there can be no assurance that we will be successful in amending the terms of the Senior Note. Should we be unsuccessful in executing an amendment or an extension, Mr. Beck, as the senior secured lender, could move to seize the underlying collateral which would have a material adverse effect on the Company’s ability to continue as a going concern.

Cornerworld Corp 10-Q