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Notes Payable, Related Parties | 3 Months Ended
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Mar. 31, 2022
Notes Payable Related Parties |
Notes Payable, Related Parties | Note 10 – Notes Payable, Related Parties Notes payable, related parties consists of the following at March 31, 2022 and December 31, 2021, respectively:
Schedule of Notes payable, related parties |  |  |  |  |  |
|  | March 31, |  |  | December 31, |
|  | 2022 |  |  | 2021 |
On December 31, 2021, the Company received $1,500,000 pursuant to a note and warrant purchase agreement with the Company’s Chairman and CEO, Mr. & Mrs. Goldfarb, as lenders. The unsecured note bears interest at 8% per annum, compounded semi-annually, and shall be payable in cash semi-annually on June 30th and December 31st. The note matures on December 31, 2024. The noteholders also received warrants to purchase 225,000 shares of common stock, exercisable at $2.21 per share over a ten-year term. |  | $ | 1,500,000 |  |  | $ | 1,500,000 |
On December 31, 2021, the Company received $500,000 pursuant to a note and warrant purchase agreement from the Lyle A. Berman Revocable Trust, as beneficially controlled by one of the Company’s Directors, as lender. The unsecured note bears interest at 8% per annum, compounded semi-annually, and shall be payable in cash semi-annually on June 30th and December 31st. The note matures on December 31, 2024. The noteholder also received warrants to purchase 75,000 shares of common stock, exercisable at $2.21 per share over a ten-year term. |  |  | 500,000 |  |  |  | 500,000 |
On December 31, 2021, the Company received $25,000 pursuant to a note and warrant purchase agreement from the Company’s then CFO, Bradley K. Burke, as lender. The unsecured note bears interest at 8% per annum, compounded semi-annually, and shall be payable in cash semi-annually on June 30th and December 31st. The note matures on December 31, 2024. The noteholder also received warrants to purchase 3,750 shares of common stock, exercisable at $2.21 per share over a ten-year term. |  |  | 25,000 |  |  |  | 25,000 |
On December 31, 2021, the Company received $50,000 pursuant to a note and warrant purchase agreement from the Cesar J. Gutierrez Living Trust, as beneficially controlled by the brother of the Company’s CEO, as lender. The unsecured note bears interest at 8% per annum, compounded semi-annually, and shall be payable in cash semi-annually on June 30th and December 31st. The note matures on December 31, 2024. The noteholder also received warrants to purchase 7,500 shares of common stock, exercisable at $2.21 per share over a ten-year term. |  |  | 50,000 |  |  |  | 50,000 |
Total notes payable, related parties |  |  | 2,075,000 |  |  |  | 2,075,000 |
Less unamortized debt discounts: |  |  | 639,489 |  |  |  | 699,213 |
Notes payable |  |  | 1,435,511 |  |  |  | 1,375,787 |
Less: current maturities |  |  | – |  |  |  | – |
Notes payable, related parties, less current maturities |  | $ | 1,435,511 |  |  | $ | 1,375,787 |
The Company recorded total discounts of $699,213, consisting of debt discounts on warrants granted to the related parties during the year ended December 31, 2021. The discounts are being amortized to interest expense over the term of the notes, until repayment, using the straight-line method, which closely approximates the effective interest method. The Company recognized $102,299 of interest expense for the three months ended March 31, 2022. Interest expense consisted of $42,575 of stated interest expense and $59,724 of amortized debt discounts related to stock-based warrants. There was no interest expense during the three months ended March 31, 2021.

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