NOTES RECEIVABLE

6 Months Ended

Jun. 30, 2020

NOTES RECEIVABLE

NOTES RECEIVABLE

NOTE 6. NOTES RECEIVABLE

As of June 30, 2020, our notes receivable consisted of the following:

CCR Note	$	375,000
BB Note		100,000
Total principal		475,000
Allowance for doubtful accounts		(125,000)
Unamortized loan origination fee		(1,694)
		348,306
Less: Current portion		(348,306)
Long-term portion	$	—

In March 2019, we agreed to loan an aggregate of up to $375,000 to Consolidated C.R., LLC (“CCR”) pursuant to the terms of a convertible promissory note (“CCR Note”), bearing interest at 12% per annum, collateralized by substantially  all of the assets of CCR and subject to a maturity date of September 2020. As of May 30, 2019, we had loaned the entire available amount of $375,000 to CCR pursuant to the CCR Note. CCR is a vertically integrated medical cannabis company located in San Juan, Puerto Rico. As of June 30, 2020, the outstanding amount of the loan was $375,000.  The CCR Note included a loan origination fee of  $15,000, which is being recognized as interest income over the term of the agreement. As of June 30, 2020, this loan is in default. A notice of default was sent to the borrower in April 2020.  As we have a first priority security interest in substantially all of the assets of CCR, and since the CCR Note is in default we have recognized an allowance in the amount of $125,000 for the quarter ended June 30, 2020.

On January 3, 2019, we loaned  $100,000 to Beacher Brewing, LLC (“BB”) pursuant to the terms of a promissory note (“BB Note”), bearing interest at 11% per annum and an initial maturity date of January 3, 2020.  Interest is due in advance at the beginning of each quarter.  On December 13, 2019, we agreed to extend the final maturity date of the BB Note to January 3, 2021.