| Note 8 - LONG TERM DEBT |
Our notes payable (including accrued interest) are summarized as follows: | |
| December 31,
| |
| December 31,
| |
| |
| 2019
| |
| 2018
| |
| | | | | | |
|
| (1)
| Note payable bearing interest at 12.0% per annum, due December 31, 2020
|
| $
| 118,000
| |
| $
| 106,000
|
|
| (2)
| Note bearing interest at 8% per annum
| |
| -
| | |
| 494,000
|
|
| (3)
| Non-interest bearing note
| |
| -
| | |
| 10,000
|
|
| (4)
| Related Party Long term debt bearing interest at 8%, due April 15, 2021
| |
| 93,000
| | |
| 92,000
|
|
| (5)
| Related Party Promissory note bearing interest at 18%, due December 31, 2020
| |
| 556,000
| | |
| 714,000
|
|
| (6)
| Convertible note bearing interest at 10%, due August 8, 2020
| |
| 81,000
| | |
| -
|
|
| (7)
| Convertible note bearing interest at 10%, due December 16, 2020
| |
| 45,000
| | |
| -
| |
| | |
| 893,000
| | |
| 1,416,000
| |
|
| Less current maturities
| |
| (880,000
| )
| |
| (1,361,000
| )
|
| | | | | | | | | |
|
| Total Long-term debt
|
| $
| 13,000
| |
| $
| 55,000
| |
Total future minimum payments due on long-term debt as of December 31, 2019: | 2020
| |
| 880,000
|
|
| 2021
| |
| 13,000
| |
| |
| 893,000
| |
| 1.
| The Company issued a note payable on December 31, 2018 with a principal amount of $100,000 bearing interest at a rate of 12% per annum, with quarterly accrued interest payments and with a balloon payment due by the maturity date of December 31, 2019. The balloon payment due on December 31, 2019 was not made and the Company issued, in exchange for the original note, a new note dated December 31, 2019 with a principal amount of $100,000 bearing interest at a rate of 12% per annum, with quarterly accrued interest payments and a balloon payment due on the maturity date of December 31, 2020. The amounts owing on the note as of December 31, 2019 were $100,000 of principal plus $18,000 of accrued interest.
|
|
|
| 2.
| During the year ended December 31, 2019, the Company determined that due to the statute of limitations, this obligation has been legally extinguished and as such has recognized a gain on cancellation of debt totaling $511,000.
|
|
|
| 3.
| During the year ended December 31, 2019, the Company determined that due to the statute of limitations, this obligation has been legally extinguished and as such has recognized a gain on cancellation of debt totaling $10,000.
|
|
|
| 4.
| The Company executed a promissory note payable to a director of the Company as a part of the terms to a settlement agreement dated April 1, 2018 with a principal amount of $113,000 bearing interest at a rate of 8.0% per annum. Principal payments in the amount of $3,000 with accrued interest were payable monthly starting May 15, 2018.
|
|
|
| 5.
| The Company issued a note payable on December 31, 2018 with a principal amount of $714,000, bearing interest at a rate of 18% per annum, with monthly principal and accrued interest payments and with a balloon payment due by the maturity date of December 31, 2019. The balloon payment due on December 31, 2019 was not made and the Company issued, in exchange for the original note, a new note dated December 31, 2019 with a principal amount of $556,000, bearing interest at a rate of 18% per annum, with monthly principal and accrued interest payments and a balloon payment due by the maturity date of December 31, 2020. The amounts owing on the note as of December 31, 2019 were $556,000 of principal plus a nominal amount of accrued interest.
|
|
|
| 6.
| In August 2019 the Company signed a $78,000 convertible promissory note due twelve months after issuance and received $75,000 net of closing fees. Interest at 10% per annum is not due until maturity. The amounts owing on the convertible note as of December 31, 2019 were $78,000 in principal with accrued interest of $3,000. One hundred eighty (180) days following the date of funding and thereafter, the note is convertible into common stock of the Company ("Common Stock"). The conversion price of the Note is 61% of the Market Price (as defined in the Note) for the Common Stock (a discount of 39%). The conversion price is determined on the basis of the average of the three (3) lowest closing bid prices for the Common Stock during the prior fifteen (15) trading day period. There is an ascending prepayment penalty percentage applied should the Company prepay the note during the first one hundred eighty (180) days after which the Company shall have no right of prepayment. The note holder is limited to receive upon conversion no more than 4.99% of the issued and outstanding Common Stock at the time of conversion at any one time.
|
|
|
| 7.
| In December 2019 the Company signed a $45,000 convertible promissory note payable to a different finance company due twelve (12) months after issuance and received $40,000 net of closing fees. Interest at 10% per annum is not due until maturity. The amounts owing on the convertible note as of December 31, 2019 were $45,000 of principal and a nominal amount of accrued interest. One hundred eighty (180) days following the date of funding and thereafter, the note is convertible into common stock of the Company ("Common Stock"). The conversion price of the Note is 61% of the Market Price (as defined in the Note) for the Common Stock (a discount of 39%). The conversion price is determined on the basis of the lowest traded price for the Common Stock during the prior twenty (20) trading day period. There is an ascending prepayment penalty percentage applied should the Company prepay the note during the first one hundred eighty (180) days after which the Company shall have no right of prepayment. The note holder is limited to receive upon conversion no more than 4.99% of the issued and outstanding Common Stock at the time of conversion at any one time.
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|