Annual report pursuant to Section 13 and 15(d)

Loans Payable

Loans Payable
12 Months Ended
Dec. 31, 2020
Debt Disclosure [Abstract]  
Loans Payable



The Company’s loans payable are summarized below:


    December 31, 2020     December 31, 2019  
    Gross Principal Amount     Debt Discount     Loans Payable,
Net of Debt Discount
    Gross Principal Amount     Debt Discount     Loans Payable,
Net of Debt Discount
PPP Loan   $ 242,486     $     -     $ 242,486     $ -     $ -     $ -  
EIDL     94,000       -       94,000       -       -       -  
2020 Demand Loan     14,749       -       14,749       -       -       -  
2018 Demand Loan     -       -       -       6,678       -       6,678  
2018 Loan     301,559       -       301,559       352,395       -       352,395  
2017 Loan     15,115       -       15,115       67,491       -       67,491  
Land Loan     80,413       -       80,413       468,500       (16,762 )     451,738  
Total Loans Payable     748,322       -       748,322       895,064       (16,762 )     878,302  
Less: current portion     437,731       -       437,731       795,064       (13,345 )     781,719  
Loans Payable, non-current   $ 310,591     $ -     $ 310,591     $ 100,000     $ (3,417 )   $ 96,583  


During the years ended December 31, 2020 and 2019, the Company made principal payments on loans payable in the aggregate of $355,583 and $197,034, respectively, of which $7,940 and $0, respectively, were paid on the 2020 Demand Loan, $5,906 and $0, respectively, were paid on the 2018 Demand Loan, $50,836 and $112,255, respectively, were paid on the 2018 Loan, $40,662 and $53,279, respectively, were paid on the 2017 Loan, and $250,239 and $31,500, respectively, were paid on the Land Loan. The remaining decrease in principal balances are the result of the impact of the change in exchange rates during the period.


The Company incurred interest expense related to the loans payable in the amount of $57,633 and $130,311 during the years ended December 31, 2020 and 2019, respectively, of which $9,335 and $21,336, respectively represented amortization of debt discount.


Future minimum principal payments under the loans payable are as follows:


Years ending December 31,   Payment  
2021   $ 437,731  
2022     217,091  
2023     2,037  
2024     2,105  
2025     2,195  
Thereafter     87,163  
    $ 748,322  


Land Loan


On August 19, 2017, the Company purchased 845 hectares of land adjacent to its existing property at AWE. The Company paid $100,000 at the date of purchase and executed a note payable in the amount of $600,000, denominated in U.S. dollars (the “Land Loan”) with a stated interest rate of 0% and with quarterly payments of $50,000 beginning on December 18, 2017 and ending August 18, 2021. At the date of purchase, the Company took possession of the property, with full use and access, but will not receive the deed to the property until after $400,000 of the purchase price has been paid. The Company imputed interest on the note at 7% per annum and recorded a discounted note balance of $517,390 on August 19, 2017, which is being amortized over the term of the loan using the effective interest method. On August 12, 2020, the terms of the Land Loan were amended such that (i) the original maturity date (August 18, 2021) was changed to December 31, 2020 and (ii) the remaining balance was reduced by $137,850 from $459,500 to $321,652. The Company agreed to pay the loan in four equal payments at the end of each month starting August 30, 2020. The amendment was accounted for as a debt restructuring with the future undiscounted cash flows being less than the net carrying value of the original debt. No interest expense is recorded going forward and all future payments reduce the carrying value. A gain of $130,421 was recorded in connection with the restructuring of the Land Loan.


Demand Loan


On March 1, 2020, the Company received a loan in the amount of $27,641 (ARS $1,777,778) (the” 2020 Demand Loan”) which bears interest at 10% per month and is due upon demand of the lender (the “Demand Loan”). Interest is paid monthly.


PPP Loan


On May 6, 2020, the Company entered into a potentially forgivable loan from the U.S. Small Business Administration (“SBA”) pursuant to the Paycheck Protection Program (“PPP”) enacted by Congress under the Coronavirus Aid, Relief, and Economic Security Act (15 U.S.C. 636(a)(36)) (the “CARES Act”), resulting in net proceeds of $242,487 (the “PPP Loan”). To facilitate the PPP Loan, the Company entered into a note payable agreement with Santander Bank, N.A. as the lender.


Under the terms of the CARES Act, as amended by the Paycheck Protection Program Flexibility Act of 2020, the Company is eligible to apply for and receive forgiveness for all or a portion of their respective PPP Loan. Such forgiveness will be determined, subject to limitations, based on the use of the loan proceeds for certain permissible purposes as set forth in the PPP, including, but not limited to, payroll costs (as defined under the PPP) and mortgage interest, rent or utility costs (collectively, “Qualifying Expenses”) incurred during the 24 weeks subsequent to funding, and on the maintenance of employee and compensation levels, as defined, following the funding of the PPP Loan. The Company intends to use the proceeds of the PPP Loan for Qualifying Expenses. However, no assurance is provided that the Company will be able to obtain forgiveness of the PPP Loan in whole or in part. Any amounts that are not forgiven incur interest at 1.0% per annum and monthly repayments of principal and interest are deferred to the earlier of (i) when the Small Business Administration remits the forgiven amount to the lender or notifies the lender that no forgiveness is allowed or (ii) October 31, 2021. While the Company’s PPP Loan currently has a two-year maturity, the amended law will permit the Company to request a five-year maturity, subject to the approval of the counterparty. On March 26, 2021, the Company was approved for the forgiveness on the full amount of the PPP Loan. (See Note 18 – Subsequent events).


SBA Economic Injury Disaster Loans


On May 22, 2020, the Company received a loan in the principal amount of $94,000 (the “EIDL Loan”) pursuant to the Economic Injury Disaster Loan (“EIDL”) assistance program offered by the SBA in response to the impact of the COVID-19 pandemic on the Company’s business. The EIDL Loan bears interest at 3.75% per annum and matures on May 22, 2050. Proceeds from the EIDL are being used for working capital purposes. Monthly installment payments of $459, including principal and interest, are due monthly beginning May 22, 2021. The EIDL Loan is secured by a security interest in all of the Company’s assets.