The Company has the following advances on future receipts as of December 31, 2021:

SCHEDULE OF ADVANCES ON FUTURE RECEIPTS 

Note A and B

On June 30, 2020, 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 withdrew an aggregate of $6,000 from the Company’s operating account each banking day. The term of the agreement extended until the advances were paid in full. The notes did not bear any interest, however, the average interest was imputed at a rate of 28% based on the face value of the note and the proceeds received. As a result, the Company recorded a liability of $1,012,000 to account for the future receipts sold and a debt discount of $284,000 to account for the difference between the future receipts sold and the cash received. The debt discount was amortized over the term of the agreement. As of December 31, 2020, the outstanding balance of the notes amounted to $177,000 and the unamortized balance of the debt discount was $67,000.

During the year ended December 31, 2021, the Company paid the entire balance due of $177,000 and amortized the remaining debt discount of $67,000.

Note C

On October 29, 2021, the Company received secured advances from an unaffiliated third party totaling $2,015,000 for the purchase of future receipts/revenues of $2,120,000. Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an average of $353,000 from the Company’s operating account each month. The term of the agreement extends until the advances are paid in full. The Company also granted security interest to the unaffiliated third party with respect to all accounts receivable, present and future instruments, documents, chattel paper and general intangibles and all cash deposits and reserves. The notes did not bear any interest, however, the interest was imputed at a rate of 5% based on the face value of the notes and the proceeds received. As a result, the Company recorded a liability of $2,120,000 to account for the future receipts sold and a debt discount of $105,000 to account for the difference between the future receipts sold and the cash received. The debt discount was amortized over the term of the agreement.

During the year ended December 31, 2021, the Company paid $821,000 and amortized $35,000 of the debt discount. As of December 31, 2021, the outstanding balance of the note amounted to $1,299,000 and the unamortized balance of the debt discount was $70,000.

Note D

On October 29, 2021, the Company received secured advances from an unaffiliated third party totaling $2,744,000 for the purchase of future receipts/revenues of 3,808,000. Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an aggregate of $19,040 from the Company’s operating account each banking day. The term of the agreement extends until the advances are paid in full. The Company also granted security interest to the unaffiliated third party with respect to all accounts receivable, present and future instruments, documents, chattel paper and general intangibles and all cash deposits and reserves. The notes did not bear any interest, however, the interest was imputed at a rate of 28% based on the face value of the note and the proceeds received. These advances are secured by the Company’s tangible and intangible assets. As a result, the Company recorded a liability of $3,808,000 to account for the future receipts sold and a debt discount of $1,064,000 to account for the difference between the future receipts sold and the cash received. The debt discount is being amortized over the term of the agreement using the effective interest rate method.

During the year ended December 31, 2021, the Company paid $815,000 and amortized $370,000 of the debt discount. As of December 31, 2021, the outstanding balance of the note amounted to $2,993,000 and the unamortized balance of the debt discount was $694,000.

Note E

On December 23, 2021, the Company received secured advances from an unaffiliated third party totaling $651,000 for the purchase of future receipts/revenues of $689,000. Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an average of $115,000 from the Company’s operating account each month. The term of the agreement extends until the advances are paid in full. The Company also granted security interest to the unaffiliated third party with respect to all accounts receivable, present and future instruments, documents, chattel paper and general intangibles and all cash deposits and reserves. The notes did not bear any interest, however, the interest was imputed at a rate of 5% based on the face value of the notes and the proceeds received. As a result, the Company recorded a liability of $689,000 to account for the future receipts sold and a debt discount of $38,000 to account for the difference between the future receipts sold and the cash received. The debt discount is being amortized over the term of the agreement.

During the year ended December 31, 2021, the Company paid $0 and amortized $2,000 of the debt discount. As of December 31, 2021, the outstanding balance of the note amounted to $689,000 and the unamortized balance of the debt discount was $36,000.

Other

During the year ended December 31, 2021, the Company received secured advances from unaffiliated third parties totaling $7,368,000 for the purchase of future receipts/revenues of $9,355,000. As a result, the Company recorded a liability of $9,355,000 to account for the future receipts sold and a debt discount of $1,987,000 to account for the difference between the future receipts sold and cash received.

During the year ended December 31, 2021, the Company paid the entire balance of $9,355,000 and amortized $1,987,000 of debt discount.