Convertible Promissory Notes, Net
|3 Months Ended|
Mar. 31, 2021
|Convertible Promissory Notes, Net|
|Convertible Promissory Notes, Net||
6Convertible Promissory Notes, Net
On March 31, 2020, the Company completed and closed its first round of its fifth offering subscription for the issuance of convertible promissory notes for convertible preferred membership interests (“Notes”) and received $1,162,500 which increased the aggregate Notes to $4,837,500 as of March 31, 2020. Notes matured and converted into membersip interests prior to or in conjunction with the Corporate Conversion, at which time all of the Company’s outstanding membership interests converted into shares of common stock.
The Notes bore interest at 8% per annum, with a maximum term of 18 months. The Notes were unsecured obligations and did not contain any financial covenants or restrictions on the payments to members, the incurrence of indebtedness, or the issuance or repurchase of securities by the Company.
The Company recognized interest expense related to the Notes as follows:
The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef