SCHEDULE OF NOTES PAYABLE RELATED PARTIES |
The
Company has the following outstanding notes payable as of June 30, 2022 and December 31, 2021:
SCHEDULE
OF NOTES PAYABLE RELATED PARTIES
Note |
|
Issuance Date |
|
Maturity Date |
|
Interest Rate |
|
|
Original Borrowing
|
|
|
Balance at June 30, 2022
|
|
|
Balance at December 31, 2021
|
|
Related party note payable (A)
|
|
December 1, 2015 |
|
April 1, 2023 |
|
|
12.0 |
% |
|
$ |
1,249 |
|
|
$ |
725 |
|
|
$ |
725 |
|
Related party note payable (B)
|
|
April 4, 2016 |
|
June 4, 2021 |
|
|
12.0 |
% |
|
|
343 |
|
|
|
40 |
|
|
|
40 |
|
Note payable (C)
|
|
May 15, 2020 |
|
May 15, 2050 |
|
|
3.75 |
% |
|
|
150 |
|
|
|
150 |
|
|
|
150 |
|
Convertible Notes Due 2023 (D)
|
|
January 12, 2022 |
|
January 12, 2023 |
|
|
6.0 |
% |
|
$ |
6,300 |
|
|
|
4,404 |
|
|
|
- |
|
Debt discount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(128 |
) |
|
|
- |
|
Debt issuance costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(196 |
) |
|
|
- |
|
Total notes payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,995 |
|
|
|
915 |
|
Non-current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(875 |
) |
|
|
(875 |
) |
Current |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4,120 |
|
|
$ |
40 |
|
|
(A) |
On
December 1, 2015, the Company issued a convertible note payable to Mr. Cutaia, the Company’s Chief Executive Officer and a director, to
consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. On May 12, 2022, the maturity date of the note
was extended to April
1, 2023. As of June 30, 2022, and December 31, 2021, the outstanding balance under the note was $725. |
|
|
|
|
(B) |
On
April 4, 2016, the Company issued a convertible note payable to Mr. Cutaia, in the amount of $343, to consolidate all advances made
by Mr. Cutaia to the Company during the period December 2015 through March 2016. As of June 30, 2022 and December 31, 2021, the outstanding
balance under the note was $40. |
|
(C) |
On
May 15, 2020, the Company executed an unsecured loan with the U.S. Small Business Administration (SBA) under the Economic Injury
Disaster Loan program in the amount of $150. Installment payments, including principal and interest, will begin on October 15, 2022.
As of June 30, 2022, and December 31, 2021, the outstanding balance of the note amounted to $150, respectively.
|
|
(D) |
On
January 12, 2022, the Company entered into the Note Offering, which provided for the sale and issuance of an aggregate original
principal amount of $6,300
in convertible notes due 2023. The Company and the Note Holders also entered into a security agreement, dated January 12, 2022, in
connection with the Note Offering, pursuant to which the Company granted a security interest to the Note Holders in substantially
all of its assets. There are no financial covenants related to these notes payable.
|
|
|
The
Company received $6,000 in gross proceeds from the sale of the Notes. The Notes bear
interest of 6.0% per annum, have an original issue discount of 5.0%, mature 12 months from the closing date, and have an initial
conversion price of $3.00, subject to adjustment in certain circumstances as set forth in the Notes.
In
connection with the Note Offering, the Company incurred $460 of debt issuance costs. The debt issuance costs and the debt discount
of $300 are being amortized over the term of the Notes using the effective interest rate method. During the six months ended
June 30, 2022, the Company amortized $172 of debt discount and $264 of debt issuance costs. As of June 30, 2022, the amount of unamortized
debt discount and debt issuance costs was $128 and $196, respectively.
As
of June 30, 2022, and December 31, 2021, the outstanding balance of the Notes amounted to $4,404,
and $0,
respectively. During the six months ended June 30, 2022, the Company repaid $1,896
in principal payments pursuant to the Note Holders pursuant to the Notes.
Beginning
on May 12, 2022, the Company was required to make nine monthly principal payments of $246,
plus accrued interest, to the Note Holders, with the remaining principal amount of $2,436,
plus accrued interest, due on the maturity date. The Note Holders agreed to allow the Company to defer the payment originally due on
June 12, 2022 and to instead increase the amount of the principal payments required to be made beginning on July 12, 2022 to $281,
with the remaining principal amount of $2,436,
plus accrued interest, due on the maturity date. There was no change in the aggregate amount of indebtedness as a result of this
payment deferral.
|
|
SCHEDULE OF INTEREST EXPENSE |
The
following table provides a breakdown of interest expense for the periods presented:
SCHEDULE OF INTEREST EXPENSE
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
Interest expense – amortization of debt discount |
|
$ |
372 |
|
|
$ |
565 |
|
Interest expense – amortization of debt issuance costs |
|
|
151 |
|
|
|
- |
|
Interest expense – other |
|
|
119 |
|
|
|
31 |
|
|
|
|
|
|
|
|
|
|
Total interest expense |
|
$ |
642 |
|
|
$ |
596 |
|
Total
interest expense for notes payable to related parties (see Notes A and B above) was $23 and $29 for the three months ended June 30, 2022
and 2021, respectively. The Company paid $0 and $34 in interest to related parties for the three months ended June 30, 2022 and 2021, respectively.
The following table provides a
breakdown of interest expense for the periods presented:
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
Interest expense – amortization of debt discount |
|
$ |
908 |
|
|
$ |
1,040 |
|
Interest expense – amortization of debt issuance costs |
|
|
264 |
|
|
|
- |
|
Interest expense – other |
|
|
226 |
|
|
|
64 |
|
|
|
|
|
|
|
|
|
|
Total interest expense |
|
$ |
1,398 |
|
|
$ |
1,104 |
|
|