Notes Payable

3 Months Ended

Mar. 31, 2022

Payables and Accruals [Abstract]

Notes Payable

Notes Payable

    The notes payable balance consists of the following:

Total notes payable, net at January 1, 2022	$	2,154,098
Accretion of discount	2,148
Total notes payable, net at March 31, 2022	$	2,156,246

Senior Secured Debt

    The senior secured debt bears interest at prime plus 0.75% and had an original maturity date of June 30, 2021. In connection with the June Offering, we entered into the Loan Extension Letter Agreement on June 2, 2021 which provided for an extension of the maturity date on Hale Capital’s portion of the outstanding indebtedness owed under the Amended and Restated Loan Agreement to June 30, 2023. The amount extended constituted approximately $2.2 million of the $3.5 million principal amount outstanding as of June 2, 2021. The remaining $1.3 million of the outstanding principal, which was owed to other lenders, was repaid in full on June 30, 2021.

The Company concluded that the modification created by this amendment resulted in a troubled debt restructuring under Accounting Standard Codification—Debt (Topic 470) as it was determined that a concession was granted by HCP-FVA. However, as the future payments to be made subsequent to the modification are greater than the carrying value at the time of the modification, no gain or loss was required to be recognized on the troubled debt restructuring. The change is accounted for prospectively using the new effective interest rate of the loan.

As of March 31, 2022, the Company was in compliance with the financial covenants contained in the Amended and Restated Loan Agreement.