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Debt (Tables)
 9 Months Ended
Sep. 30, 2022
Notes Payable [Member]  
Short-Term Debt [Line Items]  
Schedule of Notes Payable

Notes Payable

 

    1    2    3         4           
Terms   Notes Payable    Notes Payable     Notes Payable     Note Payable     Notes Payable     Total    In-Default 
                                    
Issuance dates of notes   April/May 2022    April/June 2022    March 2022    2019    2021           
Maturity date   October/November 2022    January/February 2023    March 2023    2020    2022           
Interest rate   19%   24%   19%   18%   10%          
Default interest rate   26%   N/A    26%   0%   0%          
Collateral   Unsecured    All assets    Unsecured    Unsecured    Unsecured           
Warrants issued as discount/issue costs   36,000    N/A    15,000    N/A    2,406,250           
                                   
Principal  $1,200,000   $5,000,000   $500,000   $250,000   $1,101,000   $8,051,000      
                                    
Balance - December 31, 2020   -    -    -    250,000    -    250,000   $250,000 
Gross proceeds   -    -    -    -    1,101,000    1,101,000      
Debt discount   -    -    -    -    (672,254)   (672,254)     
Amortization of debt discount   -    -    -    -    698,511    698,511      
Repayments   -    -    -    (250,000)   (1,127,257)   (1,377,257)     
Balance - December 31, 2021   -    -    -    -    -    -    - 
Gross proceeds   1,200,000    5,000,000    500,000    -    -    6,700,000      
Debt issue costs   (76,451)   -    (38,953)   -    -    (115,404)     
Amortization of debt issue costs   56,048    -    38,953    -    -    95,001      
Balance - September 30, 2022  $1,179,597   $5,000,000   $500,000   $-   $-   $6,679,597   $- 

 

1- These notes were issued with 36,000, three (3) year warrants, which have been reflected as debt issue costs and are amortized over the life of the debt.

 

2- The Company executed a $5,000,000, secured, revolving promissory note with a third party. The Company may draw down on the note at 80% of eligible accounts receivable. See below.

 

3- These notes were issued with 15,000, three (3) year warrants, which have been reflected as debt issue costs and were amortized over the life of the debt. Additionally, in September 2022, the Company issued an additional 12,000, three (3) year warrants, which have been treated as interest expense in connection with extending the maturity date for notes totaling $400,000 to March 2023. In October 2022, the Company repaid $100,000.

 

4- In the event of default, these notes were convertible at 75% of the market price based upon the VWAP in preceding 10 days. There were defaults. Debt discount on notes totaling $1,101,000 in principal included original issue discounts of $101,000 and debt discounts associated with warrants totaling $229,268. Additionally, the Company computed a beneficial conversion feature of $341,986.
Convertible Notes Payable [Member]  
Short-Term Debt [Line Items]  
Schedule of Notes Payable

Convertible Notes Payable – Net

 

   Convertible   Convertible   Convertible     
Terms  Notes Payable   Notes Payable   Notes Payable   Total 
                 
Issuance dates of notes   2019 and Prior    February 2020 - December 2020    January 2021 - March 2021      
Maturity date   2020    February 2021 - September 2021    May 2021 - March 2022      
Interest rate   14%   10% - 14%    5% - 12%      
Collateral   Unsecured    Unsecured    Unsecured      
Conversion price   A    A    B      
                     
Principal  $-   $2,347,000   $2,550,000   $4,897,000 
                     
Balance - December 31, 2020  $-   $1,516,170   $-   $1,516,170 
Gross proceeds   -    -    2,550,000    2,550,000 
Debt discount   -    -    (2,460,829)   (2,460,829)
Amortization of debt discount   -    517,781    2,460,829    2,978,610 
Repayments - cash   -    -    (2,550,000)D   (2,550,000)
Conversion to equity/debt modification   -    (2,110,898)   -    (2,110,898)
Reclassified to receivable   -    76,947C   -    76,947 
Balance - December 31, 2021  $-   $-   $-   $- 

 

A– Convertible at 65% multiplied by the lowest one (1) day volume weighted average price (“VWAP”) of the Company’s common stock during the ten (10) trading days prior to conversion.

 

B– Convertible at 70% - 75% multiplied by the lowest one (1) day volume weighted average price (“VWAP”) of the Company’s common stock during the ten (10) trading days prior to conversion.

 

C- During 2021, the Company overpaid a note holder by $76,947 when settling the outstanding balance. This overpayment had been recorded as a receivable and was repaid in full in April 2021.

 

D- During 2021, the Company repaid the $2,550,000 of convertible notes in full, however, one of the notes, having a principal of $2,300,000 was prepaid early. As a result, the Company paid an additional prepayment penalty equal to 120% of the outstanding amount due at the time of prepayment, resulting in additional interest expense of $465,239. Also, at the time of repayment, the embedded derivative liability ceased to exist.
Related Party [Member]  
Short-Term Debt [Line Items]  
Schedule of Notes Payable

Notes Payable – Related Parties

 

   1   2   3     
   Loan Payable   Loan Payable   Loan Payable     
Terms  Related Party   Related Party   Related Party   Total 
                 
Issuance dates of notes  Various   May 2020/January 2021   August 2021     
Maturity date  January 1, 2023/January 1, 2024   March 2021   August 2031     
Interest rate   10%   15%   10%     
Collateral   Unsecured    Unsecured    Unsecured      
Conversion price   N/A    N/A    N/A      
                     
Balance - December 31, 2020  $3,341,940   $147,500   $-   $3,489,440 
Gross proceeds   3,825,000    63,000    467,385    4,355,385 
Accrued interest included in note balance   692,458    -    -    692,458 
Conversion of debt into common stock   (2,265,967)   -    -    (2,265,967)
Repayments   -    (210,500)   -    (210,500)
Balance - December 31, 2021   5,593,431    -    467,385    6,060,816 
No activity - 2022   -    -    -    - 
Balance - September 30, 2022  $5,593,431   $-   $467,385   $6,060,816 

 

1Activity is with the Company’s Chief Executive Officer and Board Member (Kevin Brian Cox). Prior to September 30, 2021, these notes were either due on demand or had a specific due date. Additionally, these advances had interest rates from 6% - 15%. On September 30, 2021, all notes and related accrued interest were combined into two (2) new notes.

 

The new notes had due dates of June 30, 2022 or January 1, 2023. In April 2022, the notes were extended to January 1, 2023 and January 1, 2024, respectively. All notes bear interest at 10%. At September 30, 2021, the Company included $692,458 of accrued interest in the new note balance. In 2021, the Company issued 561,758 shares of common stock at $4.30/share to settle $2,415,560 of debt including principal of $2,265,967 and accrued interest of $149,593. As a result of the debt conversion with a related party, gains/losses were recognized, however, the Company increased additional paid-in capital for $2,415,560.

 

2Activity is with the Company’s former President, Chief Operating Officer and Board Member (Anthony Nuzzo). Mr. Nuzzo passed away in March 2022.

 

3Activity is with David May, who is a Board Member.
Paycheck Protection Program And Economic Injury Disaster Loan [Member]  
Short-Term Debt [Line Items]  
Schedule of Notes Payable

 

                     
   PPP   EIDL   EIDL   PPP     
Terms  SBA   SBA   SBA   SBA   Total 
                     
Issuance dates of SBA loans   April 2020    May 2020    July 2020    March 2021      
Term   18 months    30 Years    30 Years    5 Years      
Maturity date   October 2021    May 2050    July 2050    March 2026      
Interest rate   1%   3.75%   3.75%   1%     
Collateral   Unsecured    Unsecured    Unsecured    Unsecured      
Conversion price   N/A    N/A    N/A    N/A      
                          
                          
                          
Principal  $498,082   $150,000   $486,600   $518,167   $1,652,849 
                          
Balance - December 31, 2020  $498,082   $150,000   $486,600   $-   $1,134,682 
Gross proceeds   -    -    -    518,167    518,167 
Forgiveness of loan   (371,664)   -    -    -    (371,664)1
Deconsolidation of subsidiary (“TW”)   -    -    (150,000)   -    (150,000)2
Balance - December 31, 2021   126,418    150,000    336,600    518,167    1,131,185 
Forgiveness of loan   -    -    -    (518,167)   (518,167)3
Repayments   (20,807)   (3,530)   (6,455)   -    (30,792)
Balance - September 30, 2022  $105,611   $146,470   $330,145   $-   $582,226 

 

1During 2021, the Company received a partial forgiveness on a PPP loan totaling $377,743, of which $371,664 was for principal and $6,079 for accrued interest. The Company recorded this forgiveness as other income in the accompanying consolidated statements of operations.

 

2In connection with the deconsolidation of TW in 2021, $150,000 of debt was assumed by the TW’s buyer.

 

3During 2022, the Company received forgiveness on a PPP loan totaling $524,143, of which $518,167 was for principal and $5,976 for accrued interest. The Company recorded this forgiveness as other income in the accompanying consolidated statements of operations.