Annual report pursuant to Section 13 and 15(d)

Notes Payable

v3.22.1
Notes Payable
12 Months Ended
Dec. 31, 2021
Notes Payable  
Notes Payable

Note 14 – Notes Payable

 

Notes payable consists of the following at December 31, 2021 and 2020, respectively:

 Schedule of Notes Payable

    December 31,     December 31,  
    2021     2020  
             
  $ 200,000     $ -  
On December 29, 2021, the Company received an advance of $200,000 from Dr. Kenneth Perego, II, M.D., our Vice Chairman of the Board pursuant to an unsecured promissory note due January 1, 2024 that carried an 8% interest rate.   $ 200,000     $ -  
                 
On January 20, 2021, the Company completed the sale of a Promissory Note in the principal amount of $290,000 (the “First AJB Note”) to AJB Capital for a purchase price of $281,300, pursuant to a Securities Purchase Agreement between the Company and AJB Capital (the “Purchase Agreement”). The Company received net proceeds of $268,250 after deductions of debt discounts, consisting of $8,700 pursuant to an original issue discount, $7,250 of legal fees and $5,800 of brokerage fees.                
                 

The First AJB Note carried interest at a rate of 10% per annum, was to mature on October 20, 2021, and was repaid in full on September 17, 2021.

 

Pursuant to the Purchase Agreement, the Company paid a commitment fee to AJB Capital in the amount of $200,000 (the “Commitment Fee”) in the form of 2,000,000 shares of the Company’s common stock (the “Commitment Fee Shares”). As the Company repaid the First AJB Note prior to the Maturity Date, the Company exercised its right to redeem 1,000,000 of the Commitment Fee Shares for a nominal redemption price of $1.00. The issuance of the Commitment Fee Shares resulted in a debt discount of $268,250 that was amortized over the life of the loan.  

    -       -  
                 
On February 3, 2020, the Company, through its wholly-owned subsidiary, One World Pharma SAS, received an advance of 100,000,000 COP, or $29,134 USD, from an individual pursuant to an unsecured promissory note due on demand that carried a 6% interest rate. The Company repaid 50,000,000 COP, or $14,567 USD, during the year ended December 31, 2020, and repaid the remaining 50,000,000 COP, or $14,567 USD, during the year ended December 31, 2021.     -       14,567  
                 
On December 16, 2020, the Company received an advance of $125,000 from our CEO, Isiah Thomas, III pursuant to an unsecured promissory note due on demand that carried a 6% interest rate. A total of $130,610, consisting of $125,000 of principal and $5,610 of interest, was repaid on September 15, 2021.     -       125,000  
                 
On October 28, 2020, the Company received an advance of $50,000 from its CEO, Isiah Thomas, III pursuant to an unsecured promissory note due on demand that carries a 6% interest rate. A total of $52,918, consisting of $50,000 of principal and $2,918 of interest, was repaid on October 18, 2021.     -       50,000  
                 
On September 14, 2020, the Company received an advance of $26,000 from its Chairman, Dr. Kenneth Perego, II, M.D. pursuant to an unsecured promissory note due on demand that carried a 6% interest rate. The advance was repaid by the Company on March 29, 2021.     -       26,000  
                 

On May 4, 2020, the Company, through its wholly-owned subsidiary OWP Ventures, Inc., borrowed $119,274 from Customers Bank (“Lender”), pursuant to a Promissory Note issued by OWP Ventures to Lender (the “PPP Note”). The loan was made pursuant to the Payroll Protection Program established as part of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The PPP Note carried interest at 1.00% per annum, payable monthly beginning December 4, 2020, and was due on May 4, 2022. The PPP Note could have been repaid at any time without penalty.

 

Under the Payroll Protection Program, the Company was eligible for loan forgiveness up to the full amount of the PPP Note and any accrued interest. The forgiveness amount was equal to the amount that the Company spent during the 24-week period beginning May 4, 2020 on payroll costs, payment of rent on any leases in force prior to February 15, 2020 and payment on any utility for which service began before February 15, 2020. The maximum amount of loan forgiveness for non-payroll expenses was 40% of the amount of the PPP Note. A total of $121,372, consisting of $119,274 of principal and $2,098 of interest, was forgiven on February 11, 2022.

    119,274       119,274  
                 
Total notes payable     319,274       334,841  
Less: current maturities     119,274       334,841  
Notes payable, long-term potion   $ 200,000     $ -  

 

 

ONE WORLD PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

The Company recorded interest expense in the amount of $28,674 and $9,734 for the years ended December 31, 2021 and 2020, respectively, including $9,729 of interest paid to officers and directors during the year ended December 31, 2021.

 

The Company recognized interest expense for the year ended December 31, 2021 and 2020, respectively, as follows:

 Schedule of Interest Expenses

    December 31,     December 31,  
    2021     2020  
             
Interest on convertible notes   $ 17,260     $ 21,516  
Interest on notes payable     28,674       9,734  
Amortization of debt discounts     42,247       -  
Amortization of stock-based debt discounts     414,409       -  
Interest on accounts payable     8,541       16,342  
Total interest expense   $ 511,131     $ 47,592