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CARE Loans
12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
CARE Loans

10. CARE Loans

 

   December 31, 2023   December 31, 2022 
a) PPP loan – short term  $-   $- 
b) EIDL loan – short term   12,972    7,903 
b) EIDL loan – long term   137,028    142,097 
Total CARE loans  $150,000   $150,000 

 

 

(a) Paycheck Protection Program Loan

 

On April 30, 2020, the Company executed a note (the “PPP Note”) for the benefit of MUFG Union Bank, NA (the “Lender”) in the aggregate amount of $67,870 under the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The PPP is administered by the U.S. Small Business Administration (the “SBA”). The interest rate of the loan is 1.00% per annum and accrues on the unpaid principal balance computed on the basis of the actual number of days elapsed in a year of 360 days. Commencing seven months after the effective date of the PPP Note, MetAlert is required to pay the Lender equal monthly payments of principal and interest as required to fully amortize any unforgiven principal balance of the loan by the two-year anniversary of the effective date of the PPP Note (the “Maturity Date”). The Maturity Date can be extended to five years if mutually agreed upon by both the Lender and MetAlert. The PPP Note contains customary events of default relating to, among other things, payment defaults, making materially false or misleading representations to the SBA or the Lender, or breaching the terms of the PPP Note. The occurrence of an event of default may result in the repayment of all amounts outstanding under the PPP Note, collection of all amounts owing from MetAlert, or filing suit and obtaining judgment against MetAlert. Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of the loan granted under the PPP. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities. Recent modifications to the PPP by the U.S. Treasury and Congress have extended the time period for loan forgiveness beyond the original eight-week period, making it possible for MetAlert to apply for forgiveness of its PPP loan. No assurance can be given that MetAlert will be successful in obtaining forgiveness of the loan in whole or in part, as such the Company has moved the PPP Loan into short-term liabilities, until further instructions are received. The Company was in compliance with the terms of the PPP loan as of December 31, 2021, and has accrued interest on the loan of $1,160 as of December 31, 2021.

 

During the period ended December 31, 2022, the Company received notification that the loan was forgiven, and as such, $68,870 of principal has been recognized on the income statement under other income, as of December 31, 2022.

 

(b) Economic Injury Disaster Loan

 

On June 10, 2020, the Company executed a secured loan with the U.S. Small Business Administration (SBA) under the Economic Injury Disaster Loan program in the amount of $150,000. The loan is secured by all tangible and intangible assets of the Company and payable over 30 years at an interest rate of 3.75% per annum. Installment payments, including principal and interest, started in December 2022. As part of the loan, the Company also received an advance of $10,000 from the SBA. While the SBA refers to this program as an advance, it was written into law as a grant. This means that the amount given through this program does not need to be repaid and has been recognized as Other Income.

 

As of December 31, 2023, the Company calculated that 31 months of the 360 periods on the 30-year loans should be considered short-term (months since installment plan was supposed to begin), and as such $12,972 is considered short-term liabilities, has accrued interest on the loan of $21,733 as of December 31, 2023, or until the Company has received more definitive correspondence related to any potential forgiveness.