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DEBT | 12 Months Ended
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Dec. 31, 2019
Debt Disclosure [Abstract] |
DEBT | NOTE 7 – DEBT Notes Payable - Financing Agreements The Company’s notes payable relating to financing agreements classified as current liabilities consist of the following as of:
|  | December 31, 2019 |  | December 31, 2018 |
Notes Payable |  | Principal |  |  |  | Interest |  | Principal |  |  |  | Interest |
Third Party - Insurance Note 1 |  | $ | 28,500 |  |  |  | 7.31 | % |  | $ | 25,066 |  |  |  | 9.29 | % |
Third Party - Insurance Note 2 |  |  | — |  |  |  | 6.36 | % |  |  | 8,501 |  |  |  | 10.25 | % |
Third Party - Insurance Note 3 |  |  | 13,799 |  |  |  | — |  |  |  | 14,763 |  |  |  | 10.75 | % |
Total |  | $ | 42,299 |  |  |  |  |  |  | $ | 48,330 |  |  |  |  |  |
The Company entered into an agreement on December 23, 2018 with its insurance provider by issuing a $25,066 note payable (Insurance Note 1) for the purchase of an insurance policy, secured by that policy with an annual interest rate of 9.29% payable in monthly installments of principal and interest totaling $2,172 through September 23, 2019. The policy renewed on December 23, 2019 in the amount of $28,500 with an annual interest rate of 7.31% payable in monthly installments of principal and interest totaling $2,218 through October 23, 2020. The balance of Insurance Note 1 as of December 31, 2019 and December 31, 2018 was $28,500 and $25,066, respectively. The Company entered into an agreement on April 15, 2018 with its insurance provider by issuing a $49,000 note payable (Insurance Note 2) for the purchase of an insurance policy, secured by that policy with an annual interest rate of 10.25% payable in monthly installments of principal and interest totaling $4,378 through February 15, 2019. The policy renewed on April 15, 2019 in the amount of $51,940 with an annual interest rate of 6.36% payable in monthly installments of principal and interest totaling $5,326. At December 31, 2019 and December 31, 2018, the balance of Insurance Note 2 was zero and $8,501, respectively. The Company entered into an agreement on September 15, 2018 renewing with its insurance provider by issuing a $15,810 note payable (Insurance Note 3), secured by that policy, with an annual interest rate of 10.75% payable in monthly installments of principal and interest totaling $1,660 through July 15, 2019. The policy renewed on September 15, 2019 in the amount of $13,799 payable in 5 installment payments. At December 31, 2019 and December 31, 2018, the balance of Insurance Note 3 was $13,799 and $14,763, respectively. Finance Lease The Company entered into an agreement on August 26, 2019 with an equipment leasing provider by issuing a $147,810 equipment finance lease payable, secured by that note, with an annual interest rate of 12.72% payable in monthly installments of principal and interest totaling $4,963 through August 1, 2022. At December 31, 2019 and 2018, the balance of the note was $134,098 and zero, respectively. At December 31, 2019, future minimum lease payments due under Finance Lease is as follows:
As of December 31, | Amount |
2020 |  | $ | 59,558 |
2021 |  |  | 59,558 |
2022 |  |  | 39,705 |
Total minimum financial lease payments |  | $ | 158,821 |
Less: interest |  |  | (24,723 | )
Total lease liability at December 31, 2019 |  | $ | 134,098 |
Less: current portion of Finance Lease |  |  | (45,072 | )
Long Term portion of Finance Lease |  | $ | 89,026 |
Notes Payable – Related Parties
|  |  |  |  |  |  |  | December 31, 2019 |  |  | December 31, 2018 |
Payable To |  |  |  |  |  |  |  | Principal |  |  | Interest |  |  | Principal |  |  | Interest* |
Related party |  |  |  |  |  |  |  |  |  | $ | 267,000 |  |  |  | 3% |  |  | $ | — |  |  |  | — |
Related party |  |  |  |  |  |  |  |  |  |  | 733,000 |  |  |  | 3% |  |  |  | — |  |  |  | — |
Total |  |  |  |  |  |  |  |  |  |  | 1,000,000 |  |  |  |  |  |  |  | — |  |  |  |  |
Less unamortized discounts |  |  |  |  |  |  |  |  |  |  | (94,627) |  |  |  |  |  |  |  | — |  |  |  |  |
Total, net |  |  |  |  |  |  |  |  |  | $ | 905,373 |  |  |  |  |  |  | $ | — |  |  |  |  |
The Company entered into an agreement with a related party on September 25, 2019 whereby the related party loaned the Company an aggregate principal amount of $267,000, pursuant to a note, repayable on June 25, 2020. The note carries an annual interest rate of 3%. In addition, the Company issued warrants permitting the related party to purchase for cash 11,920 shares of the Company’s common stock at a price of $7.70 per share. The balance of this note as of December 31, 2019 was $267,000. The Company entered into an agreement with a related party on September 25, 2019 whereby the related party loaned the Company the principal aggregate in the amount of $733,000, pursuant to a note, repayable on June 25, 2020. The note carries an annual interest rate of 3%. In addition, the Company issued warrants permitting the related party to purchase for cash 32,724 shares of the Company’s common stock at a price of $7.70 per share. The balance of this note as of December 31, 2019 was $733,000. The Company determined the relative fair value between the note and the warrants on the issue date utilizing the Bi-nominal Lattice Pricing Model for the warrants. As a result, the Company allocated $146,779 to the warrants and was recorded as a debt discount with an offset to additional paid in capital in the accompanying consolidated financial statements. The fair value pricing model used the following assumptions; stock price $7.00, warrant exercise price $7.70, expected term of 5 years, expected volatility of 86% and discount rate of 1.609%. For the year ended December 31, 2019, the Company recorded $52,152 for amortization of the debt discount discussed above to interest expense in the accompanying consolidated financial statements. The Company entered into an agreement with a related party on August 29, 2019 whereby the related party loaned the Company an aggregate principal amount of $80,000. The note carries an annual percentage rate of 8% which was repaid on September 25, 2019 in addition to $456 in accrued interest. Notes Payable The Company entered into an agreement on August 12, 2019 with a shareholder by executing a short-term $262,500 note repayable on November 11, 2019. The note was issued with a 5% original issue discount and the Company received a net amount of $250,000. No other consideration was given. On November 12, 2019, the Company repaid the short-term note in the amount of $262,500. The original issue discount of $12,500 was fully amortized in 2019.

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- Definition 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. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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