| NOTES PAYABLE |
6.
NOTES PAYABLE
The
Company has the following outstanding notes payable as of June 30, 2024 and December 31, 2023:
SCHEDULE
OF NOTES PAYABLE
| Note |
|
Issuance Date |
|
Maturity
Date
|
|
Interest
Rate
|
|
|
Original
Borrowing
|
|
|
Balance at June 30, 2024 |
|
|
Balance
at December 31, 2023 |
|
| Note payable (A) |
|
May 15, 2020 |
|
May 15, 2050 |
|
|
3.75 |
% |
|
$ |
150 |
|
|
$ |
128 |
|
|
$ |
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
128 |
|
|
|
2,149 |
|
| Non-current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(112 |
) |
|
|
(362 |
) |
| Current |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
16 |
|
|
$ |
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. Installment payments, including principal and interest, began on October 26, 2022. As of June 30, 2024 and December 31, 2023,
the outstanding principal and accrued interest balance due under the note was $128 and $137, respectively. |
| |
|
|
| |
(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 were 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 six months ended
June 30, 2024, the Company amortized the remaining amount of $99 of debt discount and $73 of debt issuance costs. |
| |
|
|
| |
|
During
the six months ended June 30, 2024, the Company issued 11,484,403 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 six months ended June 30, 2024, the Company issued 7,630,271 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 condensed consolidated statement of operations for
the three and six months ended June 30, 2024.
On
May 3, 2024, the Note was repaid in full.
|
The
following table provides a breakdown of interest expense:
SCHEDULE
OF INTEREST EXPENSE
| |
|
2024 |
|
|
2023 |
|
| |
|
Three Months Ended June 30, |
|
| |
|
2024 |
|
|
2023 |
|
| |
|
|
|
|
|
|
| Interest expense – amortization of debt discount |
|
$ |
- |
|
|
$ |
77 |
|
| Interest expense – amortization of debt issuance costs |
|
|
- |
|
|
|
57 |
|
| Interest expense – other |
|
|
10 |
|
|
|
165 |
|
| |
|
|
|
|
|
|
|
|
| Total interest expense |
|
$ |
10 |
|
|
$ |
299 |
|
| |
|
2024 |
|
|
2023 |
|
| |
|
Six Months Ended June 30, |
|
| |
|
2024 |
|
|
2023 |
|
| |
|
|
|
|
|
|
| Interest expense – amortization of debt discount |
|
$ |
99 |
|
|
$ |
163 |
|
| Interest expense – amortization of debt issuance costs |
|
|
73 |
|
|
|
127 |
|
| Interest expense |
|
|
63 |
|
|
|
480 |
|
| |
|
|
|
|
|
|
|
|
| Total interest expense |
|
$ |
235 |
|
|
$ |
770 |
|
Total
interest expense for notes payable to related parties was $0 and $46 for the six months ended June 30, 2024 and 2023, respectively. The
Company paid no interest to related parties for the six months ended June 30, 2024 and 2023, respectively.
|