General form of registration statement for all companies including face-amount certificate companies

Advance of Future Receipts

v3.20.1
Advance of Future Receipts
3 Months Ended
Mar. 31, 2020
Debt Disclosure [Abstract]  
Advance of Future Receipts
6. ADVANCE OF FUTURE RECEIPTS

 

The Company has the following advances on future receipts as of March 31, 2020:

 

Note   Issuance Date   Maturity Date   Interest
Rate
  Original Borrowing   Balance at
March 31, 2020
  Balance at
December 31, 2019
                         
Note 1   December 24, 2019   June 30, 2020     10 %   $ 506,000     $ 297,000     $ 503,000  
Note 2   December 24, 2019   June 30, 2020     10 %     506,000       297,000       503,000  
Total                   $ 1,012,000       594,000       1,006,000  
Debt discount                             (137,000 )     (274,000 )
Net                           $ 457,000     $ 732,000  

 

On December 24, 2019, the Company received two secured advances from an unaffiliated third party totaling $728,000 for the purchase of future receipts/revenues of $1,012,000. Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an aggregate of $6,000 from the Company’s operating account each banking day. The term of the agreement extends until the advances are paid in full. The Company may pay off either note for $446,000 if paid within 30 days of funding; for $465,000 if paid between 31 and 60 days of funding; or for $484,000 if paid within 61 to 90 days of funding. These advances are secured by the Company’s tangible and intangible assets.

 

As of December 31, 2019, the balance outstanding was $1,006,000 and the unamortized balance of the debt discount was $274,000.

 

During the period ended March 31, 2020, the Company repaid $411,000 and amortized the debt discount of $137,000. As of March 31, 2020, the outstanding balance of advances amounted to $594,000 and unamortized debt discount of $137,000.