Notes Payable

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Notes Payable

9. Notes Payable

At September 30, 2024 and December 31, 2023, the balances of long-term unsecured notes to unrelated parties are as follows:

	September 30, 2024
	(unaudited)			December 31, 2023
Total notes payable - Others	$	8,904,246		$	6,865,557
Less current maturities		(2,870,992	)		(2,181,400	)
Long-term maturities	$	6,033,254		$	4,684,157

These are notes payable to individuals. The notes have interest payable monthly, ranging from 6% to 8% per annum and are unsecured and subordinated. The principal is due on various dates through August 31, 2030. The maturity date of these notes automatically extends for periods of three months to six years unless the note holder requests repayment through written instructions at least ninety days prior to the maturity date of the note. The automatic maturity extension of these notes is considered a loan modification. Interest expense on these notes totaled approximately $165,000 and $120,000 during the three months ended September 30, 2024 and 2023, respectively. Interest expense on these notes totaled approximately $425,000 and $368,000 during the nine months ended September 30, 2024 and 2023, respectively. The Company received proceeds on these notes of $2,148,689 and $91,668 for the nine months ended September 30, 2024 and 2023, respectively. The Company repaid principal on these notes of $100,000 and $713,576 for the nine months ended September 30, 2024 and 2023, respectively. In August 2024, the Company exchanged, in a cashless transaction, $10,000 of these notes for 12,500 shares of common stock at a price of $0.80 per share from the exercise of previously vested incentive stock options by an employee. There were no gains or losses on this exchange.