Note 8. Asset-based loan

The Company is party to a recourse loan and security agreement with an unrelated lender dated November 30, 2022, 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 $4.5 million with a collateralized loan interest rate of 16.2% annum and uncollateralized loan interest rate of 19.2% 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 September 30, 2024 the company’s collateralized and uncollateralized asset-based loan balance was $2,922,056 and $1,479,716, respectively. As of December 31, 2023, the companies collateralized and uncollateralized asset-based loan balance was $2,587,900 and $0, respectively. For the nine months ended September 30, 2024 and 2023, the costs and interest incurred by the Company in connection with the loan and security agreement activities were $252,734 and $100,629, respectively