SHORT AND LONG TERM BORROWINGS

12 Months Ended

Dec. 31, 2022

NOTE 7 - SHORT AND LONG TERM BORROWINGS

Short-term and Long-term borrowings, consist of the following:	December 31,			December 31,
Short term debt;	2022			2021

Convertible Promissory Notes, bearing an annual interest rate of 24% secured, past due	$	112,259		$	112,259
Short-Term Note - Jean Mork Bredeson cash deficit holdback, 15%, past due		210,000			210,000
Short-Term Note - Jean Mork Bredeson purchase allocation, 15%, past due		1,409,169			1,409,169
Convertible promissory note, related party, interest rate 2.0%		1,350,000			1,500,000
Note payable – Discover Growth Fund, 20% OID, prime rate, due 04/01/2023		1,200,000			-

Total short-term debt		4,281,428			3,231,428

Long term debt;

Promissory Note - Jean Mork Bredeson, interest rate 5.5%, due 2/28/2022, past due		2,100,000			2,100,000
Funding from SBA Program, annual interest of 3.75%, due 03/30/2051		150,000			150,000
Senior Secured Redeemable Debenture, bearing an annual interest rate of 16%, due 12/31/2021, past due		826,547			826,547
Total short-term and long-term borrowings, before debt discount		7,357,975			6,307,975
Less debt discount – Note payable – Discover Growth Fund		(50,000	)		(17,719	)
Total short-term and long-term borrowings, net	$	7,307,975		$	6,290,256

Short-term and Long-term borrowings, consist of the following:
Short-term borrowings - net of discount	$	4,231,428	$	3,231,428
Long-term borrowings - net of discount		3,076,547		3,058,828
Total short-term and long-term borrowings - net of discount	$	7,307,975	$	6,290,256

On November 27, 2018, the Company received funding in conjunction with a convertible promissory note and a security purchase agreement dated November 27, 2018, in the amount of $250,000. The lender was Auctus Fund LLC. The notes have a maturity of August 27, 2019 and interest rate of 12% per annum and are convertible at a price of 60% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the twenty-five (25) trading days immediately prior to conversion. Additionally, if the stock price falls below par value, additional shares will be issued at the lower conversion rate so that stocks continue to be issued at par value. The note may be prepaid but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The Company is currently negotiating an extension with the noteholder as it is currently past due. As a result of a default provision, the interest rate has increased to 24% and additional principal was added in the amount of $15,000. As of December 31, 2022 and 2021, the outstanding balance with accrued interest was $172,077 and $145,135, respectively.

On December 31, 2019, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with TCA Special Situations Credit Strategies ICAV, an Irish collective asset vehicle (the “Buyer” or “TCA ICAV”), and TCA Beyond Commerce, LLC, a Wyoming limited liability company (“TCA Beyond Commerce”), pursuant to which the Buyer purchased from the Company a senior secured redeemable debenture having an initial principal amount of $900,000 and an interest rate of 16% per annum (the “Initial Debenture”).

The Initial Debenture, and any future debentures that may be purchased by Buyer pursuant to the Securities Purchase Agreement (the “Additional Debentures”), is secured through an unconditional and continuing security interest in all of the assets and properties, including after acquired assets, of the Company and each of its subsidiaries, which are acting as guarantors with respect to the Company’s obligations under the Initial Debenture and any Additional Debentures, pursuant to that certain Security Agreement, dated December 31, 2019, entered into by the Company and TCA Beyond Commerce in favor of the Buyer (the “Security Agreement”). In addition, Geordan Pursglove, the Company’s CEO, delivered a personal guarantee with respect to the Company’s obligations under the Securities Purchase Agreement. The maturity date on this security is December 31, 2021. During the year ended December 31, 2020 the Company paid $73,453 to reduce the loan balance.

In May 2020, the SEC appointed a Receiver to close down the TCA Global Master Fund, L.P. over allegations of accounting fraud. The amount recorded by the Company as being owed to TCA was based on TCA’s application of prior payments made by the Company. The Company believes that prior payments of principal and interest may have been applied to unenforceable investment banking and other fees and charges. It is the Company’s position that the amount owed to TCA is less than the amount set forth above.

Effective February 28, 2019 as a component of the closing of the business combination between Beyond Commerce, Inc. and Service 800, Jean Mork Bredeson, Founder and President of Service 800, the Company issued a $2,100,000 three-year 5.5% promissory note to Ms. Bredeson. Interest only payments are required during the first year of the note. The $2,100,000 promissory note is personally guaranteed by the estate of George Pursglove whose executor is Geordan Pursglove, the Company’s President and CEO.

As a component of the Service 800 transaction, in lieu of the entire cash payment of $2,100,000 being made to Ms. Bredeson, a $210,000 amount was to be withheld until May 30, 2019 and continues to be outstanding. This note does not carry any interest obligations. Also, as all cash and accounts receivables at the effective date of the closing were to be retained by Ms. Bredeson, this allocation of cash is to be distributed quarterly on a non interest basis as true-ups are derived, which amounted to $1,409,169 as of December 31, 2022 and December 31 2021. Although holdbacks did not initially include interest obligations, we agreed to begin accruing interest at 15% in October 2019. The amount of accrued interest relating to the $1,409,169 was $748,288 and $536,912 as of December 31, 2022 and 2021, respectively.

On March 30, 2021 the Company through its Service 800 Inc. subsidiary, received $150,000 in funding in conjunction with a promissory note under the SBA Loan Program. Borrower will be obligated to repay to the Bank the total outstanding balance remaining due under the Loan, including principal and interest. This loan is a 30-year term note, bearing 3.75% interest due March 30, 2051. Installment payments, including principal and interest, of $731 monthly, will begin September 1, 2023. The amount of accrued interest payable for the SBA Loan was $9,844 and $4,219 as of December 31, 2022 and 2021, respectively.

On July 19, 2021, the Company issued a convertible promissory note (the “Note”) in favor of Geordan G. Pursglove, the Company’s Chairman and Chief Executive Officer, in the principal amount of $1,500,000, in satisfaction of Mr. Pursglove’s accrued salary owing of $1,239,800 and recognized a $260,200 loss on extinguishment of debt. The Note accrues interest at 2% per annum, with the principal and interest payments due in twelve equal monthly installments. At the holder’s election, the Note is convertible into shares of the Company’s common stock, at a price per share equal to 100% of the average closing price of the Company’s common stock for the five trading days immediately preceding the date of such conversion (the “Conversion Price”). The cash maturity date is July 19, 2022. There was a conversion of $150,000 during the first quarter of 2022, and the Company issued 375,000,000 shares of common stock at the quoted stock price at the date of conversion of $0.0004 per shares. The amount of accrued interest payable on the $1,350,000 note payable was $40,285 and $13,000 as of December 31, 2022 and 2021, respectively.

On April 1, 2022, the Company entered into a promissory note (the “Note”) in favor of Discover Growth Fund, LLC (the “Discover”), in the aggregate principal amount of $1,200,000 for which the Company received $1,000,000 in cash, reflecting an original issuance discount of 20%, with repayment to be made not later than April 1, 2023. Pursuant to the Note, at any time and from time to time Discover may, in its sole discretion, subject to certain ownership limitations, convert all or any portion of the then outstanding balance of the Note into shares of the common stock of the Company at a price per share equal to the closing bid price on March 31, 2022 of $ 0.0003. The Company recorded a debt discount of $200,000 for the original issue discount amortizable over the succeeding twelve months in accordance with ASC 835-30-45. Interest expense of $150,000 was recorded for the year ended December 31, 2022.

- Definition

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.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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-Section 50
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+ Details

Beyond Commerce, Inc. 10-K