Annual report pursuant to Section 13 and 15(d)

NOTES PAYABLE AND PROMISSORY NOTES

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NOTES PAYABLE AND PROMISSORY NOTES
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
NOTES PAYABLE AND PROMISSORY NOTES

NOTE 5 – NOTES PAYABLE AND PROMISSORY NOTES

 

Notes Payable

 

In December 2020, the Company entered into a financing arrangement for $75,702 with an interest rate of 8.64% for a vehicle. The Company will make monthly payments of $1,211 over 72 months. In April 2021, the Company entered into a financing arrangement for $30,942 with an interest rate of 7.64% for a vehicle. The Company will make monthly payments of $753 over 48 months.

 

The following table provides the maturities of these notes payable as of December 31, 2021:

       
2022   $ 23,685  
2023     23,685  
2024     23,685  
2025     17,664  
2026     14,654  
Total future payments     103,373  
Less: Interest     (17,386 )
Total notes payable     85,986  
Less current portion     (17,201 )
Long-term notes payable   $ 68,785  

 

Promissory Notes

 

On September 10, 2021, the Company entered into an agreement with two lenders to issue promissory notes of $2.0 million. The promissory notes bore interest at 6% and were due at the earlier of one year from issuance or immediately upon completion of an initial public offering of the Company’s common stock. The Company also agreed to issue 266,664 shares of common stock to the lenders. Proceeds of $800,000 received from the promissory note are recorded as shareholders’ equity based on the allocation of the proceeds between the promissory note and shares of common stock issued. In addition, total issuance costs of $161,000 were allocated to the promissory note and shareholders’ equity of $96,000 and $65,000, respectively.

 

The promissory notes were repaid on October 8, 2021, with the proceeds received from the Company’s initial public offering in the amount of $2,007,333, which includes interest due for the period the promissory notes were outstanding. The Company recognized noncash interest of $54,670 for accretion on the promissory notes for the period they were outstanding. The Company recognized a loss of $841,330 representing the difference between the $2,000,000 principal and the unamortized balance of the promissory notes when repaid.