Quarterly report pursuant to Section 13 or 15(d)

Asset-based loan

Asset-based loan
3 Months Ended
Mar. 31, 2023
Asset-based Loan  
Asset-based loan

Note 8. Asset-based loan


The Company is party to a recourse loan and security agreement with an unrelated lender whereby the lender will provide loans secured by certain accounts receivable for up to 90% of the face amount, which is paid to the Company in the form of a cash advance. The Company has a revolving line-of-credit for $2 million with a loan interest rate of 15.2% annum on outstanding balances. Additionally, in the event of default the Lender at its option can increase the loan interest rate by 5% per annum for each month or partial month default on outstanding balances. Under the loan and security agreement, the Company must pay back any invoices that become uncollectable. As of March 31, 2023 and December 31, 2022, the asset-based loan was $1,138,260 and $502,349, respectively. For the three months ended March 31, 2023, the costs and interest incurred by the Company in connection with the loan and security agreement activities were $40,933.