Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

v3.20.1
Subsequent Events
3 Months Ended
Mar. 31, 2020
Subsequent Events [Abstract]  
Subsequent Events

NOTE 17 – SUBSEQUENT EVENTS

 

The Company evaluated all material events through the date the financials were ready for issuance and identified the following for additional disclosure.

 

Impact of COVID-19

 

The COVID-19 pandemic is a worldwide health crisis that is adversely affecting the economies and financial markets of many countries and may have short-term and long-term adverse effects on the Company’s business, financial condition, and results of operations that cannot be predicted as the global pandemic continues to evolve. The Company’s sales, receivables, and access to financing, have been adversely affected during the pandemic.

 

As a result of the COVID-19 pandemic, the CARES Act was signed into law, part of which provided for the Paycheck Protection Program (“PPP”) under the U.S. Small Business Administration. On April 22, 2020, the Company received a PPP loan for $211,300. Under the terms of the program, up to 100% of the loan amount may be forgiven if certain terms and conditions are met. The unforgiven amount, if any, matures in April 2022 and accrues interest at 1% per annum with principal and interest payments starting in November 2020. Management expects that a portion if not all of this loan will be forgiven.

 

Convertible Promissory Notes

 

On May 14, 2020, the Company issued a convertible note payable in the amount $500,000, with an original issue discount of $40,000 in exchange for $460,000. This note accrues interest at 10% per annum and matures on May 14, 2021. This note and accrued interest may convert into shares of common stock at the conversion price then in effect (initially $9.75 per share, subject to adjustment) any time at the holder’s option. The conversion price is subject to adjustment upon the issuance of the Company’s common stock or securities convertible into common stock at a price per share less than the then prevailing conversion price, other than specified exempt issuances. 10,000 shares of common stock were issued as a commitment fee in connection with the purchase of this note.

 

On May 14, 2020, the Company fully repaid a convertible note dated March 16, 2020 in the principal amount of $250,000 together with accrued and unpaid interest thereon.