| NOTES PAYABLE |
9.
NOTES PAYABLE
The
Company has the following outstanding notes payable as of December 31, 2024 and 2023:
SCHEDULE
OF NOTES PAYABLE
| Note |
|
Issuance Date
|
|
Maturity Date
|
|
Interest Rate
|
|
|
Original
Borrowing |
|
|
Balance at
December 31,
2024 |
|
|
Balance at
December 31,
2023 |
|
| Note payable (A)
|
|
May 15, 2020 |
|
May 15, 2050 |
|
|
3.75 |
% |
|
$ |
150 |
|
|
$ |
118 |
|
|
$ |
137 |
|
| Promissory note payable (B)
|
|
November 7, 2022 |
|
May 7, 2024 |
|
|
9.0 |
% |
|
|
5,470 |
|
|
|
- |
|
|
|
1,179 |
|
| Promissory note payable (C)
|
|
October 11, 2023 |
|
April 11, 2025 |
|
|
9.0 |
% |
|
|
1,005 |
|
|
|
- |
|
|
|
1,005 |
|
| Debt discount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
(99 |
) |
| Debt issuance costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
(73 |
) |
| Total notes payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
118 |
|
|
|
2,149 |
|
| Non-current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(98 |
) |
|
|
(362 |
) |
| Current |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
20 |
|
|
$ |
1,787 |
|
| |
(A) |
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.
Monthly payments, including principal and interest, began on October 26, 2022. As of December 31, 2024, and 2023, the
outstanding balance under the note was $118
and $137,
respectively. See Note 18 – Subsequent Events. |
| |
|
|
| |
(B) |
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, 2023, the amount of unamortized debt discount and debt issuance costs was $99 and $73, respectively. During the year ended December
31, 2024, the Company amortized the remaining amount of $99 of debt discount and $73 of debt issuance costs.
During
the year ended December 31, 2024, the Company issued 57,422 shares of its common stock pursuant to an exchange agreement in exchange
for a reduction of $1,720 on the outstanding balance of the November Notes. The shares issued for the share exchange agreement were
valued based upon the Nasdaq at-the-market price and is being consistently applied for each share exchange. As a result, there was
no gain or loss on the transaction.
On
March 18, 2024, the Company paid the November Notes in full.
|
| |
|
|
| |
(C) |
On
October 11, 2023, the Company entered into a note purchase agreement with Streeterville pursuant
to which Streeterville purchased the Note in the aggregate principal amount of $1,005. The
Note bears interest at 9.0% per annum compounded daily. The maturity date of the Note is
18 months from the date of its issuance.
During
the year ended December 31, 2024, the Company issued 38,151 shares of its common stock pursuant to an exchange agreement in exchange
for a reduction of $1,057 on the outstanding balance of the Note. The shares issued under the share exchange agreement were valued
based upon the Nasdaq at-the-market price and is being consistently applied for each share exchange. The shares issued for the final
share exchange agreement on May 3, 2024 were valued at a 10% discount resulting in a loss on this particular transaction of $90.
This amount has been recorded as a finance cost in the Company’s consolidated statement of operations for the year ended December
31, 2024.
On
May 3, 2024, the Note was repaid in full.
|
The
following table provides a breakdown of interest expense for the periods presented:
SCHEDULE
OF INTEREST EXPENSE
| |
|
2024 |
|
|
2023 |
|
| |
|
Years Ended December 31, |
|
| |
|
2024 |
|
|
2023 |
|
| |
|
|
|
|
|
|
| Interest expense – amortization of debt discount |
|
$ |
99 |
|
|
$ |
310 |
|
| Interest expense – amortization of debt issuance costs |
|
|
73 |
|
|
|
241 |
|
| Interest expense – other |
|
|
65 |
|
|
|
642 |
|
| |
|
|
|
|
|
|
|
|
| Total interest expense |
|
$ |
237 |
|
|
$ |
1,193 |
|
Total
interest expense for notes payable to related parties was $0 and $72 for the years ended December 31, 2024 and 2023, respectively. The
Company paid $0 and $162 in interest to related parties for the years ended December 31, 2024 and 2023, respectively.
|