NOTE RECEIVABLE- RELATED PARTY

6 Months Ended

Jun. 30, 2021

Note Receivable- Related Party

NOTE RECEIVABLE- RELATED PARTY

NOTE 11 - NOTE RECEIVABLE- RELATED PARTY 

In February of 2021, the Company entered into a non-interest bearing note receivable agreement whereby the Company loaned $500,000 to a related party. All obligations under this note will be secured by a security interest in The collateral as defined in the security agreement. The collateral is comprised of the entirety of the assets of the related party. The non-interest bearing note receivable was recorded at cost basis which approximates fair value because of the short-term maturity of the instrument. Certain directors of the Company are also directors of the related party. The loan matures on the earlier of (i) 180 days from the issuance date or (ii) the closing of the transactions set forth in a definitive acquisition entered into between the lender and the borrower. In the event the loan is paid in full on or before the maturity date, there shall be no interest accrued or payable on the outstanding principal amount. If an acquisition occurs, the $500,000 will be applied against the total acquisition price. If the company decides not to execute a definitive agreement within 180 days from the issuance date, the maturity date shall be the one-year anniversary of the issuance date. In the event of default, the interest shall accrue and be payable on the outstanding principal amount at a fixed rate of interest equal to 16% per annum.