NOTE 7 – NOTES PAYABLE

On April 20, 2020, the Company received a Paycheck Protection Program (“PPP”) loan under the U.S. Small Business Administration (the “SBA”) for $211,300, which was funded on April 22, 2020. 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 two (2) years from issuance and accrues interest at 1% per annum with principal and interest payments deferred until the SBA remits the Company’s loan forgiveness amount to the lender. The Company applied for forgiveness in May 2021. Management believes the loan is eligible for forgiveness in accordance with the terms of the program. If the loan amount is not forgiven in full, the Company expects to repay any unforgiven amount within one year of March 31, 2021, so the loan amount is recorded as a current liability.

On July 14, 2020, the Company issued a note payable in the amount of $25,000. This note accrued interest at 12% per annum, payable at maturity, and matured on July 31, 2020. On July 31, 2020, this note was repaid in full.

On February 6, 2021, the Company received a Second Draw Paycheck Protection Program (“PPP”) loan for $211,359, which was funded on February 8, 2021. Under the terms of the program, the loan amount may be forgiven if certain terms and conditions are met. The unforgiven amount, if any, matures five (5) years from issuance and accrues interest at 1% per annum with principal and interest payments deferred until the SBA remits the Company’s loan forgiveness amount to the lender. If the Company does not apply for loan forgiveness, payments will be deferred 10 months after the end of the covered period for loan forgiveness (24 weeks following loan disbursement). Management believes the loan will be eligible for forgiveness in accordance with the terms of the program.

Interest expense

The Company incurred interest charges on these notes payable of $822 and $0 during the three-months ended March 31, 2021 and 2020, respectively. The aggregate amount of accrued and unpaid interest on these notes payable was $2,289 and $0 as of March 31, 2021 and 2020, respectively.

Other

The Company received an Economic Injury Disaster Loan (“EIDL”) from the SBA in the amount of $500,000 in April 2021 (see Subsequent Events). The Company received an EIDL advance amount of $10,000 during the year-ended December 31, 2020. According to the SBA, the advance does not need to be repaid, so the Company recognized the advance as other income.