The note was approved under the provisions of the Coronavirus, Aid, Relief and Economic Security Act (the “CARES Act”) and the terms of the Paycheck Protection Program of the U.S. Small Business Administration’s 7(a) Loan Program. The note accrues interest for the first six months following the issuance date at a rate of 1% per annum, (increasing to 6% per annum upon the occurrence of an Event of Default (as defined in the note)), and beginning November 28, 2020, requires 18 monthly payments of $1,876 each, consisting of principal and interest until paid in full on April 28, 2022. Subsequent to issuance, the first payment due date was extended

Debt instrument interest rate

1.00%

Debt instrument, periodic payment

$ 1,876

Debt instrument maturity date

Apr. 28, 2022

Notes payable current

33,978

Economic Injury Disaster Loan [Member] | Notes Payable Two [Member]

Short-Term Debt [Line Items]

Total notes payable

$ 150,000

Decsription of debt instrument, payment terms

The note was approved under the provisions of the CARES Act and the terms of the COVID-19 Economic Injury Disaster Loan (“EIDL”) program of the SBA’s EIDL Program. The note accrues interest at a rate of

Debt instrument interest rate

3.75%

Debt instrument, periodic payment

$ 731

Debt instrument maturity date

May 28, 2050

Notes payable current

17,506

Proceeds from notes payable

$ 4,000

Notes payable, noncurrent

$ 146,890

Twelve Percentage Promissory Note [Member] | Accredited Investors [Member] | Securities Purchase Agreement with Power Up Lending Group [Member]

Short-Term Debt [Line Items]

Debt instrument interest rate

12.00%

Debt instrument maturity date

Feb. 08, 2022

Principal amount of promissory note

$ 362,250

Debt original issue discount

47,250

Proceeds from debt

$ 288,000

Payment to reimburse amount

$ 27,000

Debt installments payment amount

$ 50,715

Convertible Promissory Note [Member] | Commitment Shares [Member]

Short-Term Debt [Line Items]

Shares of restricted stock issued

250,000

Convertible Promissory Note [Member] | Returnable Shares [Member]

Short-Term Debt [Line Items]

Shares issued during period

200,000

[1]

effective April 28, 2020, the Company entered into a promissory note with an approved lender in the principal amount of $33,333. The note was approved under the provisions of the Coronavirus, Aid, Relief and Economic Security Act (the “CARES Act”) and the terms of the Paycheck Protection Program of the U.S. Small Business Administration’s 7(a) Loan Program. The note accrues interest for the first six months following the issuance date at a rate of 1% per annum, (increasing to 6% per annum upon the occurrence of an Event of Default (as defined in the note)), and beginning November 28, 2020, requires 18 monthly payments of $1,876 each, consisting of principal and interest until paid in full on April 28, 2022. Subsequent to issuance, the first payment due date was extended. The note may be prepaid by the Company at any time prior to the maturity date with no prepayment penalties. Additionally, any portion of the note up to the entire principal and accrued interest balance may be forgiven in the event the Company satisfies certain requirements as determined by the CARES Act. The Company has applied for forgiveness and expects to satisfy the requirements for forgiveness of the entire principal and accrued interest balance. The Company is awaiting receipt of approval of its requested forgiveness from the SBA through its treasury partner. At March 31, 2022, $33,978 was recorded as a current liability within notes payable of the consolidated balance sheets.

[2]

effective May 28, 2020, the Company entered into a promissory note and security agreement with the U.S. Small Business Administration (“SBA”) in the principal amount of $150,000. The note was approved under the provisions of the CARES Act and the terms of the COVID-19 Economic Injury Disaster Loan (“EIDL”) program of the SBA’s EIDL Program. The note accrues interest at a rate of 3.75% per annum, and beginning May 28, 2021, requires monthly payments of $731 each, consisting of principal and interest until paid in full on May 28, 2050. Subsequent to issuance, the SBA extended the first payment due date to 24 months from the date of the note. The note may be prepaid by the Company at any time prior to the maturity date with no prepayment penalties. Additionally, this promissory note is collateralized by certain of the Company’s property as specified within the security agreement. Furthermore, on June 4, 2020, the Company received $4,000 from the SBA, which it is currently working to obtain details from the SBA regarding this amount. As such, at March 31, 2022, the Company recorded this amount as a current liability. At March 31, 2022, $17,506 was recorded as a current liability within notes payable and $146,890 was recorded as a long-term liability within notes payable, net of current portion of the consolidated balance sheets.

MPHASE TECHNOLOGIES, INC. 10-Q