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Notes Payable and Convertible Notes Payable

3 Months Ended

Mar. 31, 2024

Notes Payable and Convertible Notes Payable

Notes Payable and Convertible Notes Payable

Note 7 – Notes Payable and Convertible Notes Payable

As of March 31, 2024 and December 31, 2023, notes payable and convertible notes payable consisted of the following:


	March 31, 2024						December 31, 2023
	Notes Payable		Debt Discount		Net		Notes Payable		Debt Discount		Net
Current portion:
D&O insurance policy loan	$	443,404	$	—	$	443,404	$	—	$	—	$	—
Avenue - Note payable		8,333,333		(621,712)		7,711,621		5,833,333		(503,914)		5,329,419
Total current portion	$	8,776,737	$	(621,712)	$	8,155,025	$	5,833,333	$	(503,914)	$	5,329,419

Non-Current portion:
Avenue - Note payable	$	2,304,167	$	(200,711)	$	2,103,456	$	4,804,167	$	(448,367)	$	4,355,800
Avenue - Convertible note payable		5,000,000		(344,219)		4,655,781		5,000,000		(398,569)		4,601,431
Total non-current portion	$	7,304,167	$	(544,930)	$	6,759,237	$	9,804,167	$	(846,936)	$	8,957,231

On February 24, 2024, the Company issued a note payable in the amount of $505,050 for the purchase of a directors and officers’ liability insurance policy (the “D&O Loan”). The note accrues interest at a rate of 8.15% per year and matures on October 24, 2024. The D&O Loan is payable in eight monthly payments of $65,076 consisting of principal and interest. During the three months ended March 31, 2024, the Company repaid $61,646 of principal owed on the D&O Loan.

During the three months ended March 31, 2024, the Company recorded interest expense of $678,658, of which $675,228 (including amortization of debt discount of $184,207) was related to the Loan and Security Agreement with Avenue Capital Management II, L.P. and related entities (together, “Avenue”) and $3,430 was related to the D&O Loan. During the three months ended March 31, 2023, the Company recorded interest expense of $454,003, of which $450,394 is related to the Loan and Security Agreement with Avenue (including amortization of debt discount of $149,490) and $3,609 is related to the D&O Loan.