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Long Term Debt

9 Months Ended

Sep. 30, 2020

11. Long Term Debt.

(a) In September 2014, NanoChem Solutions Inc. signed a $1,005,967 promissory note with Harris Bank with a rate of prime plus 0.5% (September 30, 2019 – 5.75%) to be repaid over 5 years with equal monthly installments plus interest. This money was used to retire the previously issued and outstanding debt obligations. The final payment was made in September 2019. Interest expense for the nine months ended September 30, 2019 was $3,294.

(b) In October 2018, NanoChem Solutions Inc. signed a $4,100,000 term loan with Harris Bank with a rate of prime (September 30, 2020 – 3.25%; December 31, 2019 – 4.75%) to be repaid over 7 years with equal monthly installments plus interest along two payments consisting of 25% prior year cash flow recapture, capped at $300,000, due May 31, 2019 and 2020. The money was used to purchase a 65% interest in EnP Investments LLC. Interest expense for the nine months ended September 30, 2020 was $69,139 (2019 - $152,005). The balance owing at September 30, 2020 was $1,977,381 (December 31, 2019 - $3,116,667).

The Company has committed to the following repayments:

2020	$	885,714
2021	$	585,714
2022	$	585,714
2023	$	585,714
2024	$	473,811

(c) In April 2019, NanoChem Solutions Inc. signed a loan for $1,100,000 with Harris Bank with a rate of prime plus 0.5% (September 30, 2020 – 3.75%; December 31, 2019 – 5.25%) for the purchase of new manufacturing equipment.

The Company paid interest only payments until February 2020, when equally monthly installments of the principal and interest are due until January 2024. Interest expense for the nine months ended September 30, 2020 was $33,317 (2019 – $21,399). The balance owing at September 30, 2020 was $916,667 (December 31, 2019 - $1,100,000).

The Company has committed to the following repayments:

2020	$	252,083
2021	$	275,000
2022	$	275,000
2023	$	275,000
2024	$	22,917

(d) In January 2018, EnP Investments, LLC signed a $200,000 promissory note with Midland States Bank with a rate of 5.250% to be repaid over 7 years with equal monthly installments plus interest. This money was used to purchase production equipment. Interest expense for the nine months ended September 30, 2020 was $5,860 (2019 - $6,770). The principal balance owing at September 30, 2020 is $132,389 (December 31, 2019 - $152,241).

The Company has committed to the following repayments:

2020	$	25,562
2021	$	25,562
2022	$	25,562
2023	$	25,562
2024	$	25,562

(e) In March, 2016, EnP Investments, LLC signed a $45,941 promissory note with Ford Motor Credit Company with a rate of 0.00% interest to be repaid over 5 years with equal monthly installments. In August 2020, the loan was paid off in full. The balance owing at September 30, 2020 is $nil (December 31, 2019 - $11,485).

(f) In April 2020, NanoChem Solutions Inc. received a two year loan of $322,000 through the Paycheck Protection Program with a rate of 1%. Management expects the full amount of the loan to be forgiven but at this time, it cannot be proven and has chosen to list the loan as a long term debt. Eighteen equal installments of principal and interest are due starting November 2020 if the loan amount is not forgiven in full.

(g) In April 2020, EnP Investments, LLC. received a two year loan of $215,960 through the Paycheck Protection Program with a rate of 1%. Management expects the full amount of the loan to be forgiven but at this time, it cannot be proven and has chosen to list the loan as a long term debt. Eighteen equal installments of principal and interest are due starting November 2020 if the loan amount is not forgiven in full.

As of September 30, 2020, the Company was in compliance with all loan covenants.

Continuity	September 30, 2020			December 31, 2019
Balance, January 1	$	4,380,393			4,351,743
Plus: Proceeds from loans		537,960			1,100,000
Less: Payments on loan		(1,353,956	)		(1,071,350	)
Balance, end of period	$	3,564,397		$	4,380,393

Outstanding balance	September 30, 2020			December 31, 2019
a) Long term debt – Harris Bank	$	-		$	-
b) Long term debt – Harris Bank		1,977,381			3,116,667
c) Long term debt – Harris Bank		916,667			1,100,000
d) Long term debt – Midland States Bank		132,389			152,241
e) Long term debt – Ford Credit		-			11,485
f) Long term debt – PPP		322,000
g) Long term debt – PPP		215,960
Long-term Debt	$	3,564,397		$	4,380,393
Less: current portion		(958,610	)		(1,196,722	)
	$	2,605,787		$	3,183,671