| Related Party Notes Payable |
NOTE 6 – RELATED PARTY NOTES PAYABLE
Related party notes payable consisted of
the following as of December 31:
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2020 |
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2019 |
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| 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, is unsecured, and matures in three years from origination. Interest was originally payable monthly but was amended on January 1, 2021, to be payable at maturity. |
|
$ |
1,000,000 |
|
|
$ |
1,000,000 |
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| |
|
|
|
|
|
|
|
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| 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. |
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75,000 |
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75,000 |
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|
|
|
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| 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. |
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500,000 |
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|
500,000 |
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|
2020 |
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|
2019 |
|
| |
|
|
|
|
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| 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 fully repaid on October 8, 2020. |
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- |
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- |
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| Promissory note. On November 6, 2020, the Company entered into a $94,000 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 an issuance fee of $4,000 and a one-time fixed interest charge upon issuance of $2,000, payable at maturity, is unsecured, and was originally due December 6, 2020, but the maturity date was extended to June 30, 2021. |
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94,000 |
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|
- |
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| |
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| Promissory note. On December 30, 2020, the Company entered into a $100,000 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 accrues interest at the rate of 12% per annum, is unsecured, and was originally due March 30, 2021, but the maturity date was extended to June 30, 2021. Interest was originally payable monthly but was amended on January 1, 2021, to be payable at maturity. |
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100,000 |
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- |
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| Total related party notes payable |
|
|
1,769,000 |
|
|
|
1,575,000 |
|
| |
|
|
|
|
|
|
|
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| Less current portion |
|
|
(769,000 |
) |
|
|
(575,000 |
) |
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| Long term related party notes payable |
|
$ |
1,000,000 |
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|
$ |
1,000,000 |
|
Interest expense
The Company incurred interest charges of
$190,268 and $147,605 during the years ended December 31, 2020 and 2019, respectively, on these related party notes payable of which $116,826
and $47,413 was accrued and payable as of December 31, 2020 and 2019.
Maturities
Future maturities of these related party
notes payable are as follows as of December 31:
| 2021 |
|
$ |
769,000 |
|
| 2022 |
|
|
1,000,000 |
|
| |
|
$ |
1,769,000 |
|
|