Debt

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Debt

4. Debt

Advances

On February 17 and February 22, 2021, the Company repaid $30 and $30, respectively, of accounts receivable advances from unrelated parties along with $4 of accrued but unpaid advance fees. In addition, on March 31, 2021, the Company repaid $20 in accounts receivable advances to a related party. The advance fee of $1 was repaid on April 1, 2021.

In March 2021, the Company received, from related parties, advances aggregating $25 in cash against certain accounts receivable of the Company. Upon collection of an invoice, the Company agreed to repay the advance to the lenders on a pro rata basis together with a 5% advance fee. The Company accrued $1 in advance fees recorded as interest expense on the Statement of Operations.

In July 2021, the Company received $10,000 in cash from an affiliate as an advance against certain accounts receivable. The company accrued a 5% advance fee and recorded $500 as interest expense during the three months ended September 30, 2021. Upon collection of the accounts receivable the Company will repay the advance plus the 5% fee.

In August and September 2021, the Company received $50,000 and $36,000, respectively in cash from an affiliate as advances against certain accounts receivable. The company accrued a 5% advance fees in August and September 2021, and recorded $4 as interest expense during the three months ended September 30, 2021. Upon collection of the accounts receivable the Company will repay the advances plus the 5% fee.

Notes payable:

On May 6, 2020, the Company received loan proceeds in the amount of approximately $123 under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The Company may apply for the loans and accrued interest forgiven after a period of either eight or twenty-four weeks, as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the period in question. Under the terms of the related promissory note, the unforgiven portion of the PPP loan is payable over two years at an interest rate of 1%, with a deferral of payments for the first six months.

The Company applied for full loan and interest forgiveness. In September 2021 the Company received notification that the loan related to the Paycheck Protection Program had been forgiven in full. The Company record $125 of other income on the Statement of Operations related to the forgiveness of the debt plus accrued interest.

On February 28, 2021, the Company issued an aggregate of $75 in unsecured notes, $30 to related parties and $45 to other investors. The Company received $15 in cash and $15 in exchange for an account receivable advance, received in the prior year, from related parties, and $45 in cash from other investors. The unsecured notes are convertible by the holder into common stock at any time at a price per share of $0.50. Upon closing a new financing of at least $1,000 in aggregate proceeds, the Company can force conversion at a price equal to the lesser of $0.50 per share or the price per share of the new financing. The notes bear interest at the rate of 10% per annum and are due December 31, 2021.

In April 2021, the Company re-paid $49 of Accounts Receivable Advances and $6 in accrued but unpaid 5% advance fees to an affiliate. In addition the Company repaid to another affiliate $64 of Accounts Receivable Advances and $4 in accrued but unpaid 5% advance fees.

In June 2021, the Company paid the first installment in the amount of $40 plus accrued interest of $5 of a note entered into associated with a settlement agreement dated July 1, 2020 with one of its vendors. The remaining $90 plus interest at the rate of 4% per annum is due in two installments, June of 2022 and June of 2023.

On September 30, 2021 the Company issued a note to one an affiliate investor and received $75 in cash. The note bears interest at the rate of 20% per annum and is due upon demand.

During the three and nine months ended September 30, 2021, the Company accrued $84 and $243 of interest expense, $75 and $211, respectively, associated with the outstanding secured and unsecured convertible promissory notes, of which $35 and $97 was to related parties and $40 and $114 was to other investors. For the three and nine months ended September 30, 2020, the Company accrued $83 and $221 of interest expense, $73 and $194, respectively, associated with the outstanding secured and unsecured convertible promissory notes, of which $28 and $76 was to related parties and $45 and $118 was to other investors.