NOTES PAYABLE AND PROMISSORY NOTES
|12 Months Ended|
Dec. 31, 2022
|Debt Disclosure [Abstract]|
|NOTES PAYABLE AND PROMISSORY NOTES||
NOTE 5 – NOTES PAYABLE AND PROMISSORY NOTES
The Company has entered into two financing arrangements for the purchase of vehicles with interest rates of 8.64% and 7.64%. The following table provides the maturities of these notes payable as of December 31, 2022:
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 shares of common stock to the lenders. Proceeds of $800,000 received from the promissory note were 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 non-cash 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.
The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef