| Related Party Notes Payable |
NOTE 6 – RELATED PARTY NOTES PAYABLE
Related party notes payable consisted
of the following as of:
| |
|
September 30,
2020
|
|
|
December 31,
2019
|
|
| |
|
(Unaudited) |
|
|
|
|
| |
|
|
|
|
|
|
| Inventory financing. On January 11, 2019, the Company entered into a $1,000,000 revolving inventory financing facility with a lender that is also a current stockholder that beneficially owns more than 5% of the Company’s common stock. Use of proceeds from this facility is limited to the purchase of inventory, including raw materials, intermediates, and finished goods, unless otherwise approved by the lender. This facility accrues interest at the rate of 12% per annum payable monthly, is unsecured, and matures in three years from origination. |
|
$ |
1,000,000 |
|
|
$ |
1,000,000 |
|
| |
|
|
|
|
|
|
|
|
| Officer loan. On June 26, 2019, the Company borrowed $75,000 from the Chief Executive Officer of the Company. This note accrues interest at the rate of 4.5% per annum, payable at maturity, is unsecured, and was originally due August 26, 2019, but the maturity date was extended to June 30, 2021. |
|
|
75,000 |
|
|
|
75,000 |
|
| |
|
|
|
|
|
|
|
|
| Promissory note 2019-01. On May 20, 2019, the Company entered into a $400,000 promissory note with a lender that is also a current stockholder that beneficially owns more than 5% of the Company’s common stock. On July 10, 2019, this note was amended to increase the principal sum by an additional $100,000. This note accrues interest at the rate of 12% per annum, payable at maturity, is unsecured, and was originally due August 20, 2019, but the maturity date was extended to June 30, 2021. |
|
|
500,000 |
|
|
|
500,000 |
|
| |
|
|
|
|
|
|
|
|
| Promissory note. On June 29, 2020, the Company entered into a $25,000 promissory note with a lender that is also a current stockholder that beneficially owns more than 5% of the Company’s common stock. This note accrued interest at the rate of 12% per annum, payable at maturity, was unsecured, and was originally due September 30, 2020, but the maturity date was extended to October 15, 2020. This note was subsequently repaid on October 8, 2020. |
|
|
25,000 |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
| Total related party notes payable |
|
|
1,600,000 |
|
|
|
1,575,000 |
|
| |
|
|
|
|
|
|
|
|
| Less current portion |
|
|
(600,000 |
) |
|
|
(575,000 |
) |
| |
|
|
|
|
|
|
|
|
| Long term related party notes payable |
|
$ |
1,000,000 |
|
|
$ |
1,000,000 |
|
Interest expense
The Company incurred interest charges
on these related party notes payable of $46,848 and $45,925 during the three-months ended September 30, 2020 and 2019, respectively.
The Company incurred interest charges on these related party notes payable of $138,051 and $101,385 during the nine-months ended
September 30, 2020 and 2019, respectively. The aggregate amount of accrued and unpaid interest on these related party notes payable
was $95,273 and $31,111 as of September 30, 2020 and 2019, respectively.
Maturities
Future maturities of these related
party notes payable are as follows as of September 30:
| 2021 |
|
$ |
600,000 |
|
| 2022 |
|
|
1,000,000 |
|
| |
|
$ |
1,600,000 |
|
|