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Notes Payable - Related Parties
 9 Months Ended
Sep. 30, 2024
Related Party [Member]  
Defined Benefit Plan Disclosure [Line Items]  
Notes Payable - Related Parties

8. Notes Payable - Related Parties

 

Summary of Notes Payable to Related Parties

 

The tables below summarize all notes payable to related parties at September 30, 2024 and December 31, 2023:

 

   September 30, 2024   December 31, 2023 
Notes payable – “2022 Related Notes”  $532,169   $600,000 
           
Less unamortized debt issuance costs   (20,821)   (39,398)
Long-term portion of notes payable  $511,348   $560,602 

 

The principal terms of the 2022 Related Notes, which are subordinated notes, as of September 30 are as follows:

Schedule of Subordinated Notes

 

Issue Date   Interest Rate     Interest Due   Principal Due  
April 1, 2022     12 %   Quarterly   December 31, 2025  

 

Future minimum principal payments of the 2022 Notes to related parties of $532,169 are due on December 31, 2025. As of September 30, 2024 and December 31, 2023, accrued interest for these notes payable – related parties was $0. As of September 30, 2024 and December 31, 2023, unamortized deferred financing costs were reflected within long term liabilities on the condensed consolidated balance sheets, netted with the corresponding notes payable balance.

 

In July 2024, a principal amount of $250,000 of the 2022 Unrelated Notes were sold by the unrelated noteholder to related parties at face value, comprised of $75,000 sold to Michael N. Taglich, a director of the company, $75,000 sold to Robert F. Taglich (each a more than 5% beneficial owner of the Company’s shares), and $100,000 sold to Nicholas Taglich and Juliana Taglich.

 

With respect to notes payable – related parties outstanding, interest expense, including the amortization of debt issuance costs, for the three and nine months ended September 30, 2024 and 2023 was $28,526 and $75,987, and $25,879 and $77,638, respectively.