Commercial and SBA Loans

3 Months Ended

Mar. 31, 2024

Note 8 – Commercial and SBA Loans

Schedule of Commercial and SBA Loans

	March 31,			December 31,
Party	2024			2023
Chase auto loan (Note 8)	$	34,210		$	36,222
SBA Loan (a)		12,137			12,344
Third party individual (b)		50,000			50,000
Third party entity A (c)		14,170			21,256
Third party entity B (d)		4,278,263			4,149,950
Third party entity C (e)		386,091			386,091
Total commercial loans		4,774,871			4,655,863
Less: current portion		(458,979	)		(466,065	)
Non-current portion	$	4,315,892		$	4,189,798

During the three months ended March 31, 2024, the Company recognized interest expense $131,014 and paid interest of $93,388 with cash. As of March 31, 2024, interest payable of $50,289 was was presented and included in the accounts payable and accrued liabilities on the consolidated balance sheet.

On July 14, 2020, the Company entered into a loan agreement with the U.S. Small Business Administration (“SBA”), pursuant to which the Company obtained a loan in the amount of $14,000 with the term of 30 years and interest rate of 3.75%, payable monthly including principal and interest in the amount $69. As of March 31, 2024 and December 31, 2023, the current portion of the outstanding loan balances were $670 and $670, respectively.

During the year ended December 31, 2023, the Company received a loan of $50,000 from a third-party individual. The loan is unsecured, due on April 10, 2024, and bears an interest rate of 5% per annum. The loan was subsequent extended to be due on or before May 30, 2024 as agreed by the third-party individual and Legend LP.

In December 2023, the Company received a loan of $20,000 from a third-party due within 9 months. The loan origination fee was $1,256 which was unpaid as of December 31, 2023, and included in the total loan balance. Monthly payment of the loan totaled $2,362. During the three months ended March 31, 2024, the Company made repayment of $7,085. And as of March 31, 2024, the loan totaled $14,171.

d.	Upon acquisition of Legend LP, the Company assumed loan from Legend LP which is payable to a third-party (the “Lender”) in the principal amount of $3,531,200 (the “Existing Loan”). On March 23, 2023, Legend LP extended the Existing Loan with the Lender in a promissory note (the “Note”) at the interest rate of 3.73% per annum over “The Wall Street Journal Prime Rate,” as the rate may change from time to time. “The Wall Street Journal Prime Rate” is and shall mean the variable rate of interest, on a per annum basis, which is announced and/or published in the Money Rates section of The Wall Street Journal from time to time as its prime rate. The Note rate shall be redetermined whenever The Wall Street Journal Prime Rate Changes. The Note was formally signed and completed between Legend LP and the lender on April 5, 2023. Pursuant to the Note, the loan is due March 20, 2025.

	During the year ended December 31, 2023, the Company received an additional amount of $448,000 from this Lender which was paid directly to vendors for real estate investments and $80,000 in cash for working capital purpose. Accrued interest of $80,338 for the Note and prepayments of $10,412 made on behalf of the Company were included in the commercial loan balance as of December 31, 2023. During the year ended December 31, 2023, the Company recognized interest expense and loan fee of $472,977, with $348,309 paid in cash. As of December 31, 2023, interest payable of $44,330 was presented and included in the accounts payable and accrued liabilities on the consolidated balance sheet.

	During the three months ended March 31, 2024, the Company received loan proceeds of $30,000, and advance of $68,313, which was paid directly to vendors for real estate investments. $30,000 addition of loan principal were converted from the interest payable, thus, the principal balance of the Existing Loan was $4,278,263 with $45,497 interest payable outstanding as of March 31, 2024.

e.	The Company assumed a third-party loan in the total amount of $386,091 upon acquisition of Legend LP, which is unsecured, non-interest-bearing and due on demand.

- 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

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+ Details

FORGE INNOVATION DEVELOPMENT CORP. 10-Q/A