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Notes Receivable
12 Months Ended
Dec. 31, 2021
Receivables [Abstract]  
Notes Receivable

Note 2. Notes Receivable

 

The Company accepted an unsecured convertible promissory note (the “Convertible Note”) from TEC, a former related party (see Note 9. Co-Venture Agreement with Modern Round), in the amount of $292,138 for a portion of their minimum royalty payment due as of May 31, 2018. The Convertible Note bears interest at the rate of five percent (5%) per annum and contains a provision requiring remittance of not less than 20% of the net proceeds of any private or public offering of its securities in reduction of the Convertible Note. The Convertible Note has a conversion right, at the sole discretion of the Company, to convert the outstanding balance of principal and accrued interest at any time for shares of common stock of TEC. Prior to the due date, the Company may elect to convert the Convertible Note for shares of common stock in TEC at a twenty-five percent (25%) discount to the price of shares sold to the public in a public offering in connection with a go-public transaction. The issuance of common stock upon conversion shall be made without charge to the Company. No fractional shares shall be issued upon conversion and in lieu of fractional shares, TEC will pay the Company the amount of any obligation that is not converted. Any unpaid balance of principal and accrued interest becomes due and collectible on the earlier of (i) August 1, 2019 (maturity date), or (ii) if declared due and payable in the event of Default. In July 2019, the Convertible Note’s maturity date was extended to August 2020, with all other terms remaining unchanged. Under the terms of the Convertible Note, TEC remitted a payment of $16,000 of which $14,972 was applied to accrued interest and $1,028 to principal. In July 2020, the Convertible Note’s maturity date was extended to August 2023, and all other promissory note terms remain unchanged. The Convertible Note’s principal and accrued interest due as of December 31, 2020 was $311,367. Due to the ongoing effects of COVID-19 and the inability of TEC to meet its payment obligations under the terms of the Convertible Note, the Company recorded a reserve in the full amount of the note and accrued interest as of December 31, 2020. The reserve for collectability as of December 31, 2021, and 2020 was $311,367. See Note 9-Co-Venture Agreement with Modern Round.