Notes Payable – Stockholders and Related Parties

6 Months Ended

Jun. 30, 2023

Notes Payable Stockholders And Related Parties

Notes Payable – Stockholders and Related Parties

11. Notes Payable – Stockholders and Related Parties

At June 30, 2023 and December 31, 2022, the balances of long-term notes payable to stockholders and related parties are as follows:

	June 30, 2023
	(unaudited)			December 31, 2022
Total notes payable - Related parties	$	1,928,000		$	1,925,000
Less current maturities		(587,000	)		(109,000	)
Long-term maturities	$	1,341,000		$	1,816,000

These are notes payable to stockholders and related parties. The notes have interest payable monthly of 8% per annum and are unsecured and subordinated. The principal is due on various dates through August 31, 2026. The maturity date of these notes automatically extends for periods of one to four years unless the note holder requests repayment through written instructions at least ninety days prior to the maturity date of the note. The automatic maturity extension of these notes is considered a loan modification. Interest expense on these notes totaled approximately $40,000 and $41,000 during the three months ended June 30, 2023 and 2022, respectively. Interest expense on these notes totaled approximately $79,000 and $80,000 during the six months ended June 30, 2023 and 2022, respectively. The Company received proceeds on these notes of $30,000 and $25,000 for the six months ended June 30, 2023 and 2022, respectively. The Company repaid principal on these notes of $27,000 and $181,032 for the six months ended June 30, 2023 and 2022, respectively. In January 2022, the Company exchanged $20,000 of these notes payable for 2,000 shares of Series A Convertible Preferred Stock at a price of $10.00 per share. There were no gains or losses on this exchange.