Quarterly report pursuant to Section 13 or 15(d)

NOTES PAYABLE

v3.20.2
NOTES PAYABLE
9 Months Ended
Sep. 30, 2020
NOTES PAYABLE  
NOTE 9. NOTES PAYABLE

NOTE 9 - NOTES PAYABLE

 

Notes payable consist of the following:

 

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Promissory note dated November 22, 2017, issued for the purchase of real property.  Matures December 1, 2020, with an option to extend the maturity date 1 year.  The promissory note bears interest at 12.0% for year one and escalates 0.5% per year thereafter up to 13.5%. In the event of default, the note is convertible at the holder's option.

 

$ -

 

 

$ 4,500

 

Promissory note dated January 18, 2018, issued for the purchase of real property.  The promissory note is collateralized by the land and building purchased and matures February 1, 2021, with an option to extend the maturity date 1 year.  The promissory note bears interest at 12.0% for year one and escalates 0.5% per year thereafter up to 13.0%.  The full principle balance and accrued interest are due at maturity. In the event of default, the note is convertible at the holder's option.

 

 

6,500

 

 

 

6,500

 

Promissory note dated October 5, 2018, issued for the purchase of real property.  Matures October 5, 2021.  The promissory note bears interest at 12.0% for year one and escalates 0.5% per year thereafter up to 13.5%. In the event of default, the note is convertible at the holder's option.

 

 

1,600

 

 

 

1,600

 

Promissory note dated June 11, 2019, issued to accredited investors, which matures December 11, 2020 and bears interest at a rate of 7.5% per annum. The conversion price is $4.50 or 87% of the average of the two (2) lowest VWAPs in the thirteen (13) trading days prior to the conversion date.

 

 

2,900

 

 

 

4,000

 

Promissory note dated October 21, 2019, issued to accredited investors, which matures April 21, 2021 and bears interest at a rate of 7.5% per annum. The conversion price is $4.50 or 87% of the average of the two (2) lowest VWAPs in the thirteen (13) trading days prior to the conversion date.

 

 

775

 

 

 

1,500

 

Secured promissory note dated December 30, 2019, issued to Matthew Lee Morgan Trust (a related party), which matures December 30, 2020, and bears interest at a rate of 10% per annum.   The note is secured by the Company's HydroFarm investment.

 

 

500

 

 

 

500

 

Secured promissory note dated January 10, 2020, issued to an unaffilitated third party.   The note matures on January 10, 2021 and incurs an interest rate of 15.0% per annum. 

 

 

1,000

 

 

 

-

 

Promissory note dated May 4, 2020, issued to Harvest Small Business Finance, LLC, an unaffiliated third party.   Loan is part of the Paycheck Protection Program ("PPP Loan") offered by the U.S. Small Business Administration.   The interest rate on the note is 1%.   The note requires interest and principle payments seven months from April 2020.   The note matures in two years.

 

 

562

 

 

 

-

 

Promissory note dated July 29, 2020, issued to an unaffilitated third party.  The note incurs an interest rate of 8% per annum and matures on April 28, 2021. 

 

 

1,000

 

 

 

-

 

Secured promissory note dated September 30, 2020 issued to an unaffiliated third party.  The loan accrues interest at a rate of 10% per annum and matures on December 31, 2020. 

 

 

73

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Notes payable - promissory notes & mortgages

 

$ 14,910

 

 

$ 18,600

 

Vehicle loans & other loan agreements

 

 

32

 

 

 

46

 

Less: Short term debt, net of discounts

 

 

(12,855 )

 

 

(11,021 )

Less:  Debt discount

 

 

(210 )

 

 

(1,055 )

Net Long Term Debt

 

$ 1,877

 

 

$ 6,570

 

2018 Master Securities Purchase and Convertible Promissory Notes Agreement

 

In March 2018, the Company entered into the 2018 Master Securities Purchase Agreement with an accredited investor pursuant to which the Company sells to the accredited investor 7.5% Senior Convertible Promissory Notes in eight tranches of $5.00 million, for a total of $40.00 million. The Company converted $1.83 million of convertible notes into shares of the Company’s common stock during the nine months ended September 30, 2020. As of September 30, 2020, $3.68 million of principle remains outstanding.

 

For each note issued under the 2018 Master Securities Purchase Agreement, the principal and interest due and owed under the note is convertible into shares of Common Stock at any time at the election of the holder at a conversion price per share equal to the lower of (i) the original conversion price as defined in each note issuance or (ii) 87% of the average of the two lowest daily volume weighted average price of the Common Stock in the thirteen (13) trading days prior to the conversion date (“Conversion Price”). The Conversion Price is subject to adjustment for (i) stock splits, stock dividends, combinations, or similar events and (ii) full ratchet anti-dilution protection. Upon certain events of default, the conversion price will automatically become 70% of the average of the three (3) lowest volume weighted average prices of the Common Stock in the twenty (20) consecutive trading days prior to the conversion date for so long as such event of default remains in effect.

 

In addition, at any time that (i) the daily volume weighted average price of the Common Stock for the prior ten (10) consecutive trading days is $10.50 or more and (ii) the average daily trading value of the Common Stock is greater than $2.50 million for the prior ten (10) consecutive trading days, then the Company may demand, upon one (1) days’ notice, that the holder convert the notes at the Conversion Price.

 

The Company may prepay in cash any portion of the outstanding principal amount of the notes and any accrued and unpaid interest by, upon ten (10) days’ written notice to the holder, paying an amount equal to (i) 110% of the sum of the then-outstanding principal amount of the notes plus accrued but unpaid interest, if the prepayment date is within 90 days of the issuance date of the notes; (ii) 115% of the sum of the then-outstanding principal amount plus accrued but unpaid interest, if the prepayment date is between 91 days and 180 days of the issuance date of the notes; or (iii) 125% of the sum of the then-outstanding principal amount of the notes plus accrued but unpaid interest, if the prepayment date is after 180 days of the issuance date of the notes. 

During the nine months ended September 30, 2020, the Company converted debt and accrued interest into 27,694,593 shares of the Company’s common stock.

 

Additional Financing Arrangements

 

On December 30, 2019, the Company issued a promissory note to Matthew Lee Morgan Trust (a related party), which matures on December 30, 2020.The note accrues interest at a rate of 10% per annum. The note is secured by the Company’s HydroFarm investment.

 

On January 10, 2020, the Company issued a promissory note to an unaffiliated third party, in the amount of $1.00 million dollars. The note accrues interest at a rate of 15.00% per annum and matures on January 10, 2021. The note is secured by the Company’s real estate located at 620 E. Dyer Rd., Santa Ana, CA.

 

On May 4, 2020, OneQor Technologies, Inc entered into a Promissory Note dated May 4, 2020 (the “PPP Note”) with Harvest Small Business Finance, LLC (the “Lender”), pursuant to which the Lender agreed to make a loan to the Company under the Paycheck Protection Program (the “PPP Loan”) offered by the U.S. Small Business Administration (the “SBA”) in a principal amount of $0.56 million pursuant to Title 1 of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). The PPP Loan proceeds are available to be used to pay for payroll costs, including salaries, commissions, and similar compensation, group health care benefits, and paid leaves; rent; utilities; and interest on certain other outstanding debt. The amount that will be forgiven will be calculated in part with reference to OneQor’s full time headcount during the eight week period following the funding of the PPP loan. The interest rate on the PPP Note is a fixed rate of 1% per annum. To the extent that the amounts owed under the PPP Loan, or a portion of them, are not forgiven, OneQor will be required to make principal and interest payments in monthly installments beginning seven months from April 2020. The PPP Note matures in two years. The PPP Note includes events of default. Upon the occurrence of an event of default, the lender will have the right to exercise remedies against OneQor, including the right to require immediate payment of all amounts due under the PPP Note.

On July 29, 2020, the Company issued a promissory note to an unaffiliated third party, in the amount of $1.00 million. The note incurs interest at a rate of 8.00% per annum and matures on April 28, 2021.

 

On September 30, 2020, the Company issued a promissory note to an unaffiliated third party, in the amount of $0.07 million. The note accrues interest at a rate of 10.00% per annum and matures on December 31, 2020.