Quarterly report pursuant to Section 13 or 15(d)

Notes and Loan Payable

v3.20.2
Notes and Loan Payable
6 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
Notes and Loan Payable

Note 7. Notes and Loan Payable

 

In January 2020, the Company entered into a financing arrangement for commercial insurance with First Insurance Funding. The total amount financed was approximately $66,000 with an annual interest rate of 6.64%, to be paid over a period of ten months. In June 2020, the policy was canceled, and the remaining loan balance was satisfied. As of June 30, 2020, there is no remaining loan balance on the Company's condensed consolidated balance sheet related to the First Insurance financing arrangement.

 

On May 1, 2020 (the "Origination Date"), the Company received $108,500 in aggregate loan proceeds (the "PPP Loan") from JPMorgan Chase Bank (the "Lender") pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The PPP Loan is evidenced by a loan application and payment agreement (the "PPP Loan Agreement") by and between the Company and the Lender. Subject to the terms of the PPP Loan Agreement, the PPP Loan bears interest at a fixed rate of one percent (1.0%) per annum. Payments of principal and interest are deferred for the first six months following the Origination Date, and the PPP Loan will mature two years after the Origination Date. Following the deferral period, unless the loan is forgiven, the Company will be required to make payments of principal plus interest accrued under the PPP Loan to the Lender in monthly installments based upon an amortization schedule to be determined by the Lender based on the principal balance of the PPP Loan outstanding following the deferral period and taking into consideration any portion of the PPP Loan that may be forgiven prior to that time. The PPP Loan is unsecured and guaranteed by the U.S. Small Business Administration.

 

During the three months ended June 30, 2020, the Company received approximately $103,000 in funding resulting from a loan that was funded incorrectly. The Company's return of the funds was hindered due to the lending institution's reduced staffing and delayed responsiveness as a result of the coronavirus (COVID-19) pandemic. All of the funds from the loan were returned by the Company in July 2020, and no loan funds were expended prior to the return.