FACTORING LIABILITY

6 Months Ended

Sep. 30, 2023

Factoring Liability

FACTORING LIABILITY

NOTE 6 – FACTORING LIABILITY

On July 1, 2019, we entered into a Factoring and Security Agreement with Factors Southwest, LLC (“FSW”). FSW may purchase from time to time the Company’s Accounts Receivables with recourse on an account by account basis. The twenty-four month agreement contains a maximum advance amount of $5,000,000 on 85% of eligible accounts and has an annualized interest rate of the Prime Rate published from time to time by the Wall Street Journal plus 4.5%. The agreement contains a fee of 3% ($150,000) of the Maximum Facility assessed to the Company. Our obligations under this agreement are secured by present and future accounts receivables and related assets, inventory, and equipment. The Company has the right to terminate the agreement, with 30 days written notice, upon obtaining a non-factoring credit facility. This agreement provides the Company with the ability to convert our account receivables into cash. We did not have an outstanding balance on our Factoring liability as of September 30, 2023. For the three and six months ended September 30, 2023, interest expense recognized on the Factoring Liability was $57,982 and $103,367, respectively, including $25,000 of amortization of the commitment fee. For the three and six months ended September 30, 2022, interest expense recognized on the Factoring Liability was $9,119 and $68,935 including $37,500 of amortization of the commitment fee.

On June 17, 2023, per the terms of this agreement, the maturity date was extended to June 17, 2025.