Note 5 - Note Payable

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Long-term Debt [Text Block]

5. NOTE PAYABLE

On March 31, 2012, the Company received $1,000,000 from a third party and issued a related promissory note. The note carries an 8% interest rate, per annum, and has a maturity date of March 31, 2017. Interest accrues on the balance and converts to separate notes payable on a quarterly basis. The total amounts due under this agreement, including the notes related to accrued interest, are due in full at the end of the term. The note is secured by all of the assets of the Company through an accompanying security agreement. If the Company defaults on the note or security agreement, interest would accrue at 10% per annum. The company was unable to meet its payment obligation by the prescribed deadline, therefore the interest rate stepped up to 10% and interest has been accrued using at the stepped up rate starting April 1, 2017. The gross amounts payable under the agreement as of September 30, 2021 and December 31, 2020 were $2,272,237 and $2,109,857 respectively.

The scheduled maturities of notes and LOC payable outstanding as of September 30, 2021 are as follows:

	2025		2026		pending		Total
Notes payable	$	-	$	-	$	2,272,237	$	2,272,237
Letter of Credit		-		-		350,000		350,000
Notes payable - related party		182,000		442,313		-		624,313
Total	$	182,000	$	442,313	$	2,622,237	$	3,246,550