Annual report pursuant to Section 13 and 15(d)

DEBT

v3.22.1
DEBT
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
DEBT

NOTE 11 – DEBT

 

Debt as of December 31, 2021, and 2020 was comprised of the following:

    December 31,     December 31,  
    2021     2020  
PAYROLL PROTECTION PROGRAM                
                 
Under the Small Business Administration (“SBA”), the Company applied for the Paycheck Protection Program (“PPP”) loan. These loans are forgiven if used for payroll, payroll benefits, including health insurance and retirement plans, as well as certain rent payments, leases, and utility payments, which are limited to 40% of the loan proceeds, all of which if paid within either 8 weeks or 24 weeks of the receipt of the loan proceeds. At the time of this filing, we anticipate a significant amount of this loan to be forgiven, however the forgiveness application process is not yet complete. The Company has elected to record these advances under the debt treatment for these loans, under GAAP guidance.  Unforgiven portions of these loans are to be repaid over 5 years, accruing interest at 1% per annum.   $ 96,600     $ 252,800  
                 
                 
SHORT TERM NOTES                
                 
Secured short term note payable dated October 13, 2017 with principal and interest due 60 days from issuance. The note requires a one-time fee in the amount of $4,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $400 shall be due and owing accruing on the first day of the week. The total one-time fee paid was $6,400 and was recorded as interest. A fee of 40,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding past the original maturity date for months 3 through 6, and a fee of 80,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding past the original maturity date beginning in month 7 until paid in full. The note is secured by the future sale of CoronaLux units and a personal guarantee of an officer of the Company. The penalty period for shares to be issued has been reached, however, the debt holder agreed to a reduction and a fixed amount of penalty shares in 2018, as issuable under the terms of this agreement. No additional shares will be issued by the Company. The reduction of penalty shares was accounted for as debt extinguishment and a gain was recorded in 2018.  No interest accrues on the unpaid balance.     100,000       100,000  
                 
Secured short term note payable dated November 6, 2017 with principal and interest due 60 days from issuance. The note requires a one-time fee in the amount of $5,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $400 shall be due and owing accruing on the first day of the week. The total one-time fee paid was $7,400 and was recorded as interest. A fee of 50,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding past the original maturity date for months 3 through 6, and a fee of 100,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding past the original maturity date beginning in month 7 until paid in full. The note is secured by the future sale of CoronaLux units and a personal guarantee of an officer of the Company. The penalty period for shares to be issued has been reached, however, the debt holder agreed to a reduced and fixed amount of penalty shares during 2018. No additional shares will be issued by the Company. The reduction of penalty shares was accounted for as debt extinguishment and a gain was recorded in 2018.  No interest accrues on the unpaid balance.     125,000       125,000  
                 
Note payable dated November 20, 2017, interest at 30% per annum, principal and accrued interest due on or before February 28, 2018. The note is unsecured. During 2018, a verbal agreement was made to allow month-to-month extension of the due date as long as interest payments were made monthly. The Company made interest payments totaling $84,100 of which $37,726 of interest and principal reduction of $1,900 was paid by the issuance of 140,000 shares of common stock during 2018 and the note holder has continued to extend the due date. Unpaid interest at December 31, 2021 is approximately $286,300.     298,100       298,100  

 

 

Secured short term note payable dated February 1, 2019 with principal and interest due 90 days from issuance. The note requires a one-time fee in the amount of $15,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-12) a fee of $1,500 shall be due and owing accruing on the first day of the week. The total one-time fee totals $30,000 and was recorded as interest. A fee of 50,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding past the original maturity date for months 4 through 6, and a fee of 100,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding past the original maturity date beginning in month 7 until paid in full. The note is secured by the future sale of any and all PelleChar products and a personal guarantee of an officer of the Company. The penalty period for shares to be issued has been reached, and the maximum agreed common shares have been accrued, and has been recorded as interest expense in prior periods. Unpaid one-time fees at December 31, 2021 is approximately $30,000.     500,000       500,000  
                 
Secured short term note payable dated July 2, 2019 with principal and interest due 60 days from issuance. The note requires a one-time issuance of 500,000 options, which the company recorded the fair value of $37,300 as debt discount, amortized over the life of the note. The note accrues interest at 12% annually. The note is past due as the date of this filing. The Company has not received notice from the lender and continue to accrue interest. For the year ended December 31, 2021, the Company recorded interest expense of $12,000. Unpaid interest at December 31, 2021 is approximately $30,000.     100,000       100,000  
                 
Secured short term note payable dated July 18, 2019 with principal and interest due 60 days from issuance. The note requires a one-time fee in the amount of $5,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-12) a fee of $500 shall be due and owing accruing on the first day of the week and was recorded as interest. A fee of 15,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding past the original maturity date for months 3 through 6, and a fee of 30,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding past the original maturity date beginning in month 7 until paid in full. The note is secured by the future sale of any and all MV Technology, LLC products. The penalty period for shares to be issued has been reached, and the maximum agreed common shares have been accrued, and has been recorded as interest expense in prior periods.  Unpaid interest at December 31, 2021 is approximately $10,000.     150,000       150,000  
                 
Secured short term note payable dated October 17, 2019 with principal and interest due 6 months from issuance. On April 24, 2020, this note was extended to October 15, 2020. The note requires a one-time issuance of 200,000 common shares of the Company upon the maturity date of the note, which the company recorded the fair value of $13,000 as debt discount, amortized over the life of the note. The note extension requires a one-time issuance of 200,000 common shares of the Company upon the extended maturity date of the note, which the company recorded the fair value of $20,000 as debt discount, amortized over the life of the note.  On November 3, 2020, this note was extended to October 15, 2021. The note is past due as the date of this filing. The note accrues interest at 15% annually. For the year ended December 31, 2021, the Company recorded interest expense of $45,000, and $20,000 of interest related to debt discount. Unpaid interest at December 31, 2021 is approximately $99,500.     300,000       300,000  
                 
Secured short term note payable dated December 14, 2019 with principal and interest due 6 months from issuance. The note requires a one-time issuance of 250,000 common shares of the Company upon the maturity date of the note, which the company recorded the fair value of $16,300 as debt discount, amortized over the life of the note. The note accrues interest at 15% annually. The note is past due as the date of this filing.  For the year ended December 31, 2021, the Company recorded interest expense of $67,500. Unpaid interest at December 31, 2021 is approximately $138,300.     450,000       450,000  
                 
Secured short term note payable dated September 18, 2019 with no stated maturity date. The note accrues interest at 6% annually for the first 18 months, and 12% thereafter if not paid in full. Payments will be offset by SEER building and delivering 20 kilns for BIOCHAR to the debtor, 10 of which have been delivered. For the year ended December 31, 2021, the Company recorded interest expense of $2,200. This obligation was paid in full during the first quarter of 2021 when the final kilns were delivered.  There was no unpaid interest at December 31, 2021.     -       154,700  
                 
Secured short term note payable dated October 1, 2019. The note accrues interest at 6% annually.  The note’s principal is to be paid in twelve monthly installments commencing on January 15, 2020.  At the time of this report, no payments have been made, and the an extension has been negotiated with the lender. On September 1, 2021, the company exchanged certain equipment, for a portion of this debt, reducing the outstanding principal by $34,200.  For the year ended December 31, 2021, the Company recorded interest expense of $8,000. Unpaid interest at December 31, 2021 is approximately $14,400.     50,800       85,000  

 

 

Secured short term note payable dated March 16, 2020, maturing on March 15, 2021.  The note bears annual simple interest, at a rate of 14%, and matures on March 15, 2021. The Lender receives a one-time option grant to purchase 60,000 shares of the Company’s common stock for $0.10 per share for a period of 3 years from grant date, on the maturity date, with payment of principal and interest.  These options were value at approximately $3,500, and are recorded as debt discount, and amortized over the life of the loan.  The note is past due as the date of this filing. For the year ended December 31, 2021, the Company recorded interest expense of $14,000, and $800 of interest related to debt discount. Unpaid interest at December 31, 2021 is approximately $25,100.     100,000       100,000  
                 
Secured short term note payable dated March 17, 2020, maturing on March 16, 2021. The note bears annual simple interest, at a rate of 14%. The Lender receives a one-time option grant to purchase 30,000 shares of the Company’s common stock for $0.10 per share for a period of 3 years from grant date, on the maturity date, on the maturity date, with payment of principal and interest.  These options were value at approximately $2,000, and are recorded as debt discount, and amortized over the life of the loan.  The note is past due as the date of this filing. For the year ended December 31, 2021, the Company recorded interest expense of $7,000, and $400 of interest related to debt discount. Unpaid interest at December 31, 2021 is approximately $12,500.     50,000       50,000  
                 
Secured short term note payable dated July 8, 2020, maturing on December 7, 2020, bearing annual simple interest at a rate of 15%.  The note requires a one-time issuance of 200,000 common shares of the Company upon the maturity date of the note, which the company recorded the fair value of $11,300 as debt discount, amortized over the life of the note.  The note is past due as the date of this filing. For the year ended March 31, 2021, the Company recorded interest expense of $33,000, and $200 of interest related to debt discount.  Unpaid interest at December 31, 2021 is approximately $48,900.     220,000       220,000  
                 
Unsecured short term note payable dated August 18, 2020, maturing on November 17, 2020, bearing annual simple interest at a rate of 15%.  The note is past due as the date of this filing. For theyear ended December 31, 2021, the Company recorded interest expense of $18,000.  Unpaid interest at December 31, 2021 is approximately $24,600.     120,000       120,000  
                 
Secured short term note payable dated September 3, 2020, maturing on December 4, 2020, bearing annual simple interest at a rate of 15%.  The note is past due as the date of this filing. For the year ended December 31, 2021, the Company recorded interest expense of $42,000.  Unpaid interest at December 31, 2021 is approximately $55,700.     280,000       280,000  
                 
Total Short-term notes   $ 2,843,900     $ 3,032,800  

 

 

Unsecured short term note payable dated August 21, 2019 with principal and interest due 60 days from issuance. The note requires a one-time fee in the amount of $500 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $50 shall be due and owing accruing on the first day of the week, after which the fee is $75 per week, which is recorded as interest expense. The note is from the CEO, and thus classified as a related party note. For the year ended December 31, 2021, the Company recorded interest expense of $2,400. Unpaid interest as of December 31, 2021 is $300.   $ -     $ 15,000  
                 
Secured short term note payable dated August 21, 2019 with principal and interest due 60 days from issuance. The note requires a one-time fee in the amount of $4,150 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $415 shall be due and owing accruing on the first day of the week, after which the fee is $600 per week, which is recorded as interest expense. The note is from a family member of the CEO, and thus classified as a related party note. For the year ended December 31, 2021, the Company recorded interest expense of $28,800. Unpaid interest as of December 31, 2021 is approximately $55,200.     125,000       125,000  
                 
Unsecured short term note payable dated October 7, 2019 with principal and interest due 60 days from issuance. The note requires a one-time fee in the amount of $500 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $50 shall be due and owing accruing on the first day of the week, after which the fee is $75 per week, which is recorded as interest expense. The note is from the CEO, and thus classified as a related party note. For the year ended December 31, 2021, the Company recorded interest expense of $2,400. Unpaid interest as of December 31, 2021 is approximately $300.     -       15,000  
                 
Total short-term notes - related party   $ 125,000     $ 155,000  
                 
Convertible notes payable, interest at 8% per annum, unpaid principal and interest maturing 3 years from note date between August 2018 and October 2019, convertible into common stock at the option of the lenders at a rate of $0.70 per share; one convertible note for $250,000 has a personal guarantee of an officer of the Company. The notes that matured in August 2018, were subsequently extended by one year to August 2019, all other terms remained the same. The note that matured November 2018 was subsequently extended to May 2019 and the interest rate increased to 13% per annum. No default notice has been received from the noteholders. For the year ended December 31, 2021, the Company recorded interest expense of $140,900.  Unpaid interest at December 31, 2021 is approximately $544,400.   $ 1,605,000     $ 1,605,000  
                 
Total convertible notes     1,605,000       1,605,000  
Less:  current portion     (1,605,000 )     (1,605,000 )
Long term convertible notes, including debt discount   $ -     $ -  

 

 

LONG TERM NOTES AND CAPITAL LEASE OBLIGATIONS                
                 
Note payable dated July 13, 2018, interest at 20% per annum, payable July 13, 2021. No monthly payments are due for the first six months, commencing in month seven, principal and accrued interest will be amortized and payable over the remaining 30 months. Monthly payments of principal and accrued interest did not commence in 2019. The note is secured by all assets of SEM and personally guaranteed by an officer of the Company. A fee of 200,000 shares of restricted common stock was issuable at the time of funding. During the year ended December 31, 2018, the Company recorded 200,000 shares of its common stock as issuable under the terms of this agreement. The shares were valued at $44,000 recorded as debt discount. For the year ended December 31, 2021, the Company recorded interest expense of $107,600. Unpaid interest at December 31, 2021 was approximately $346,600.   $ 500,000     $ 500,000  
                 
Note payable dated April 2020, interest at 6.8% per annum, secured by a piece of heavy equipment, of which the borrowing was used to purchase. Forty-eight monthly payments of principal and accrued interest of $2,400, commence on April 17, 2020. For the year ended December 31, 2021, the Company recorded interest expense of $5,000. Unpaid interest at December 31, 2021 was $0.     60,200       84,100  
                 
Note payable dated January 19, 2021, interest at an annual rate of 8% simple interest and matures on January 18, 2026. This note is included as part of a series of anticipated notes, all of which will be converted into common equity of Paragon Waste Services, LLC., in accordance with the note’s provisions. For the year ended December 31, 2021, the Company recorded interest expense of $11,400. Unpaid interest at December 31, 2021 was approximately $11,400.     150,000       -  
                 
Note payable dated February 2, 2021, interest at an annual rate of 8% simple interest and matures on January 18, 2026. This note is included as part of a series of anticipated notes, all of which will be converted into common equity of Paragon Waste Services, LLC., in accordance with the note’s provisions. For the year ended December 31, 2021, the Company recorded interest expense of $36,400. Unpaid interest at December 31, 2021 was approximately $36,400.     500,000       -  
                 
Note payable dated May 25, 2021, interest at an annual rate of 8% simple interest and matures on January 18, 2026. This note is included as part of a series of anticipated notes, all of which will be converted into common equity of Paragon Waste Services, LLC., in accordance with the note’s provisions. For the year ended December 31, 2021, the Company recorded interest expense of $8,900. Unpaid interest at December 31, 2021 was approximately $8,900.     185,000       -  
                 
Note payable dated August 5, 2021, interest at an annual rate of 8% simple interest and matures on January 18, 2026. This note is included as part of a series of anticipated notes, all of which will be converted into common equity of Paragon Waste Services, LLC., in accordance with the note’s provisions. For the year ended December 31, 2021, the Company recorded interest expense of $15,900. Unpaid interest at December 31, 2021 was approximately $15,900.     500,000       -  
                 
Note payable dated November 2, 2021, interest at an annual rate of 8% simple interest and matures on January 18, 2026. This note is included as part of a series of anticipated notes, all of which will be converted into common equity of Paragon Waste Services, LLC., in accordance with the note’s provisions. For the year ended December 31, 2021, the Company recorded interest expense of $3,300. Unpaid interest at December 31, 2021 was approximately $3,300.     250,000       -  
                 
Debt discount     -       (29,900 )
                 
                 
Total long-term notes and capital lease obligations     2,145,200       554,200  
Less:  current portion     (525,600 )     (523,900 )
Long term notes and capital lease obligations, long-term, including debt discount   $ 1,619,600     $ 30,300  

 

 

Debt maturities as of December 31, 2021, are as follows:

 

Year Ending December 31,      
2022   $ 5,170,500  
2023     25,600  
2024     34,600  
2025     -  
2026     -  
Thereafter     1,585,000  
 Debt maturities   $ 6,815,700  

 

All capital lease obligations of the Company have been paid and there are no future minimum lease payments under capital leases as of December 31, 2021.