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EXCEL - IDEA: XBRL DOCUMENT - ESP Resources, Inc.Financial_Report.xls
10-Q - 10-Q PERIOD ENDED SEPTEMBER 30, 2012 - ESP Resources, Inc.espi_10q.htm
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EX-32.2 - CERTIFICATION - ESP Resources, Inc.espi_ex322.htm
EX-31.1 - CERTIFICATION - ESP Resources, Inc.espi_ex311.htm
EX-31.2 - CERTIFICATION - ESP Resources, Inc.espi_ex312.htm
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v2.4.0.6
4. Long-Term Debt
9 Months Ended
Sep. 30, 2012
Debt Disclosure [Abstract]  
4. Long-Term Debt

 

On January 30, 2012, the Company purchased a vehicle by issuing debt of $59,744 with an annual interest rate of 6.4% and a term of 36 months and payments of $1,833 per month. On March 19, 2012 the Company purchased a vehicle by issuing debt of $50,328 with an annual interest rate of 5.9% and a term of 36 months and a monthly payment of $1,532.


On January 27, 2012, the Company received proceeds of $130,000 from the sale of 16% Convertible Subordinated Debentures (the “Debentures”). The Debentures are subordinate to all other secured debt of the Company, pay 16% interest per annum in cash quarterly and are convertible into the Company’s common stock by the investors at any time at a minimum conversion price per share of $.15. On March 1, 2013, June 1, 2013 and September 1, 2013, the Company shall redeem one quarter, one quarter and one half, respectively, of the face value of the balance of the Debentures in cash. In addition, the investors received 100% of the number of shares of common stock that the purchase amount would buy in warrants at the conversion price of $0.15, or a total of 866,667 warrants, with a 3-year term. The Company does not have any registration obligation in regard to the common stock. The Company analyzed the conversion option under ASC 815 and determined equity classification was appropriate. The Company then analyzed the conversion option under ASC 470-20 for consideration of a beneficial conversion feature and determined the option had intrinsic value on the date of issuance. The Company recorded a discount from the relative fair value of the warrants and the intrinsic value of the conversion option of $71,291. The Company valued the warrants using the Black-Scholes option pricing model with the following assumptions: stock price on the measurement date of $0.114; warrant term of 3 years; expected volatility of 156%; and discount rate of 0.32% and accounted for them as debt discount, which will be amortized over the term of the loan which expires September 1, 2013.


On May 7, 2012, the Company purchased vehicles by issuing debt of $106,253 with an annual interest rate of 6.4% and a term of 36 months and payments of $3,260 per month.


On May 25, 2012, the Company reached an agreement with a vendor to exchange a payable for a term debenture of $350,000 with an annual interest rate of prime plus 1.5% with a monthly principal payment of $10,000 plus accrued interest.


On May 29, 2012, the Company purchased a vehicle by issuing debt of $49,004 with an annual interest rate of 6.4% and a term of 36 months with payments of $1,500 per month.


On June 19, 2012 the company repaid $304,879 of notes payable. The effect of this transaction accelerated $39,794 of debt discount as additional amortization of debt discount.


On June 15, 2012, the Company purchased a vehicle by issuing debt of $46,115 with an annual interest rate of 4.74% and a term of 36 months with payments of $1,379.


On July 14, 2012, the Company purchased a vehicle by issuing debt of $57,082 with an annual interest rate of 5.89% and a term of 36 months with payments of $1,738.


On August 17, 2012, the Company purchased a vehicle by issuing debt of $46,651 with an annual interest rate of 4.74% and a term of 36 months with payments of $1,395.


On September 4, 2012, the Company purchased a vehicle by issuing debt of $40,451 with an annual interest rate of 5.89% and a term of 36 months with payments of $1,094.