AppSwarm Inc (SWRM)

[PCsReasy]

NOTE D – GOODWILL ($2,420,636)

Buggy World ($288,988)
On August 20, 2008, the Company executed an Asset Purchase and Stock Transfer Agreement for Buggy World, Inc., including certain rights, title and interest to a recognized trade name within the industry, Johnson’s Bug, which has been active for 31 years in the same industry and locations.

As part of the purchase the Company issued two promissory notes totaling $278,202 as follows:

1.
Secured Promissory Note to Cambio Enterprises in the amount of $263,202 dated August 12th 2008. The note bears interest of eight percent (8.0%) per annum, requires monthly principal and interest payments of $4,102, matures seven years from the date of the note or August 12, 2015 and is secured by certain assets of the Company. In addition, the note is personally guaranteed by Frank J. Drechsler, CEO and Bryan Britton, General Manager, of San West, Inc. The note is currently in default due to non-payment of the required monthly payments. As of December 31, 2008, this note was current with a total amount due of $256,112 with the current portion of the note totaling $14,816 and the non-current portion totaling $241,296. As of September 30, 2009, the total due under this note was $270,895, including $14,783 of accrued interest and $256,112 of principle. Accrued interest under this note is recorded under other current liabilities. Due to the default, the note is due on demand and thus recorded as a current liability.