| SCHEDULE OF NOTES PAYABLE RELATED PARTIES |
The
Company has the following outstanding notes payable as of December 31, 2022 and 2021:
SCHEDULE OF NOTES PAYABLE RELATED PARTIES
| Note |
|
Issuance Date
|
|
Maturity Date
|
|
Interest Rate
|
|
|
Original
Borrowing |
|
|
Balance at
December 31,
2022 |
|
|
Balance at
December 31,
2021 |
|
| Related party convertible note payable (A) |
|
December 1, 2015 |
|
April 1, 2023 |
|
|
12.0 |
% |
|
$ |
1,249 |
|
|
$ |
725 |
|
|
$ |
725 |
|
| Related party convertible 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 |
|
|
|
1,350 |
|
|
|
- |
|
| Promissory note payable (E) |
|
November 7, 2022 |
|
May 7, 2024 |
|
|
9.0 |
% |
|
|
5,470 |
|
|
|
5,470 |
|
|
|
- |
|
| Debt discount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(408 |
) |
|
|
- |
|
| Debt issuance costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(309 |
) |
|
|
- |
|
| Total notes payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,018 |
|
|
|
915 |
|
| Non-current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,215 |
) |
|
|
(875 |
) |
| Current |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
5,803 |
|
|
$ |
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 19, 2021, the Company amended
the note to allow for conversion of the note at any time at the discretion of the holder at a fixed conversion price of $1.03, which
was the closing price of the common stock on the amendment date. On May 12, 2022, the maturity date of the note was extended to April
1, 2023. As of December 31, 2022, and 2021, the outstanding balance under the note was $811 and $725, respectively. |
| |
|
|
| |
(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. On May 19, 2021,
the Company amended the note to allow for conversion of the note at any time at the discretion of the holder at a fixed conversion
price of $1.03,
which was the closing price of the common stock on the amendment date. As of December 31, 2022 and 2021, the outstanding balance
under the note was $45 and $40, respectively. |
| |
|
|
| |
(C) |
On
May 15, 2020, the Company executed an unsecured loan with the SBA under the Economic Injury Disaster Loan program in the amount of
$150. Installment payments, including principal and interest, began on October 26, 2022. In September 2022, the SBA approved an additional
loan of $350. As of April 17, 2023, the Company has not received these funds. As of December 31, 2022, and 2021, the outstanding
balance under the note was $150. |
| |
|
|
| |
(D) |
On
January 12, 2022, the Company entered into a securities purchase agreement (the “January
Note Purchase Agreement”) with three institutional investors (collectively, the “January
Note Holders”) providing for the sale and issuance of an aggregate original principal
amount of $6,300 in convertible notes due January 2023 (each, a “Note,” and,
collectively, the “Notes,” and such financing, the “January Note Offering”).
The Company and the January Note Holders also entered into a security agreement, dated January
12, 2022, in connection with the January Note Offering, pursuant to which the Company granted
a security interest to the January Note Holders in substantially all of its assets. The January
Note Purchase Agreement prohibits the Company from entering into an agreement to effect any
issuance of common stock involving a Variable Rate Transaction (as defined therein) during
the term of the agreement, subject to certain exceptions set forth therein. The January Note
Purchase Agreement also gives the January Note Holders the right to require the Company to
use up to 15% of the gross proceeds raised from future debt or equity financings to redeem
the Notes, which redemptions have been elected by the January Note Holders. 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 January Note Offering, the Company paid $461 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 year ended December 31,
2022, the Company amortized $294 of debt discount and $451 of debt issuance costs. As of December 31, 2022, the amount of unamortized
debt discount and debt issuance costs was $6 and $10, respectively.
As
of December 31, 2022 and 2021, the outstanding balance of the Notes amounted to $1,350 and $0, respectively. During the year ended
December 31, 2022, the Company repaid $4,950 in principal payments and $357 of accrued interest to January Note Holders pursuant
to the terms of the Notes.
On
January 26, 2023, the Company repaid in full all outstanding obligations under the January Note Offering dated January 12, 2022.
See Note 17 - Subsequent Events.
|
| |
(E) |
On
November 7, 2022, the Company entered into a note purchase agreement (the “November Note Purchase Agreement”) and
promissory note with an institutional investor (the “November Note Holder”) providing for the sale and issuance of an
unsecured, non-convertible promissory note in the original principal amount of $5,470,
which has an original issue discount of $470,
resulting in gross proceeds to the Company of approximately $5,000
(the “November Note,” and such financing, the “November Note Offering”). The
November Note matures eighteen months following the date of issuance. Commencing six months from the date of issuance, the Company
is required to make monthly cash redemption payments in an amount not to exceed $600. The November Note may be repaid in whole or in
part prior to the maturity date for a 10% premium. The November Note requires the Company to use up to 20% of the gross proceeds
raised from future equity or debt financings, or the sale of any subsidiary or material asset, to prepay the November Note, subject
to a $2,000 cap on the aggregate prepayment amount. Until all obligations under the November Note have been paid in full, the
Company is not permitted to grant a security interest in any of its assets, or to issue securities convertible into shares of common
stock, subject in each case to certain exceptions. verbMarketplace, LLC entered into a guaranty, dated November 7, 2022, in
connection with the November Note Offering, pursuant to which it guaranteed the obligations of the Company under the November Note
in exchange for receiving a portion of the loan proceeds.
In
connection with the November Note Offering, the Company incurred $335 of debt issuance costs. The debt issuance costs and the debt
discount of $450 are being amortized over the term of the November Notes using the effective interest rate method. As of December
31, 2022, the amount of unamortized debt discount and debt issuance costs was $402 and $299, respectively.
As
of December 31, 2022, the outstanding balance of the November Notes amounted to $5,470. See Note 17, Subsequent Events.
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