NOTES PAYABLE

9 Months Ended

Sep. 30, 2021

NOTES PAYABLE

NOTE 7 - NOTES PAYABLE

NOTE 7 – NOTES PAYABLE

Notes payable consisted of the following at September 30, 2021 and December 31, 2020:

	September 30, 2021		December 31, 2020
Related Party:
Note payable to Craig Holland, non-interest bearing, maturing on December 31, 2021	$	6,925	$	6,925
Convertible note payable to Craig Holland, non-interest bearing, maturing on December 31, 2021		186,450		186,450
Convertible note payable to Mick Donahoo, non-Interest bearing, maturing on December 31, 2021		186,450		186,450
Other:
Note payable to financial institution, secured by vehicle, interest at 2.9%, due in 2025		35,952		43,193
Paycheck Protection Program loan, payable to Financial institution, 1% interest, principal and interest deferred six months, payments starting in November, 2020, due in 2022		-		174,420
Paycheck Protection Program loan, payable to Financial institution, 1% interest, principal and interest deferred six months, payments starting in December, 2021, due in 2026		174,421		-
Small Business Loan, payable to financial institution, 3.75% interest, payments starting in June 2021, due in 2050		150,000		150,000
Total notes payable	$	740,198	$	747,438
Less current portion		414,075		525,175
Notes payable, net of current portion	$	326,123	$	222,263

On April 30, 2020, the Company received a U.S. Small Business Administration Loan under the Paycheck Protection Program (PPP Loan) primarily for payroll costs related to the COVID-19 crisis in the amount of $174,420. Under the Paycheck Protection Program, the PPP Loan has a fixed interest rate of 1%, a maturity date two years from the date of the funding of the loan and no payments are due for six months. Pursuant to the terms of the PPP Loan, the Company may apply for forgiveness of the amount due on the PPP Loan in an amount equal to the sum of the following costs incurred by the Company during the 8-week period (or any other period that may be authorized by the U.S. Small Business Association) beginning on the date of first disbursement of the loan: payroll costs, any payment of interest on a covered mortgage obligation, payment on a covered rent obligation, and any covered utility payment. The amount of PPP Loan forgiveness shall be calculated in accordance with the requirements of the Paycheck Protection Program, including the provisions of Section 1106 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), although no more than 25% of the amount forgiven can be attributable to non-payroll costs. The Company applied for and received loan forgiveness in 2021.

On January 25, 2021, the Company received an additional PPP Loan in the amount of $174,421. Under the Paycheck Protection Program, the PPP Loan has a fixed interest rate of 1%, a maturity date five years from the date of the funding of the loan and no payments are due for six months. Other terms are consistent with the first PPP loan.

On May 18, 2020, the Company received an additional U.S. Small Business Administration Loan (SBA Loan) in the amount of $150,000 to alleviate continued economic injury caused by the COVID-19 crisis. The SBA Loan has a fixed interest rate of 3.75% and matures in thirty years from the date of the loan. Payments were to begin twelve months from the effective date in a fixed amount of $731 per month but have been deferred for another six months. All payments will be applied to interest first. This loan is secured by the general assets of the Company.

The Company had a note payable to Craig Holland, its Chief Executive Officer, with a balance of $6,925 at September 30, 2021 and 2020. The Company also had convertible notes payable to Mr. Holland and Mick Donahoo, its Chief Financial Officer, with a total balance of $372,900 as of September 30, 2021 and 2020. Messrs. Holland and Donahoo have the right, at any time, at their election, to convert all or part of the amount due into shares of fully paid and non-assessable shares of common stock of the Company. The fixed conversion price is $0.02 per share.

The Company has imputed interest expense on the notes payable – related party using an annual rate of 10%. During the nine months ended September 30, 2021 and 2020, total imputed interest expense was $28,409 and $28,514, respectively, which was recorded to additional paid-in capital.

Future maturities of notes payable as of September 30, 2021 are as follows:

December 31,	Amount
2021	$	385,762
2022		51,836
2023		54,668
2024		55,729
2025		47,976
Thereafter		144,226
Notes Payable	$	740,198