Bantek Inc (BANT)

[McThompson]

NOTE 8 - NOTE AND LOAN PAYABLE



On October 19, 2017, the Company entered into a loan agreement with a third party entity under which the Company received approximately $232,500, net of fees and expenses of $17,500 recorded as debt discounts and amortized to interest expense over the Note term, in return for issuing a promissory note (the “Note”) in the principal amount of $250,000. The Note bears interest at 12% (18% default rate) per annum and has a maturity date of April 20, 2018. The Note may be prepaid in full or in part with additional premium or penalty. The Note is secured by certain assets of the Company’s CEO, certain assets of Howco and all of the assets of Drone USA as a junior security interest to the first secured interest of the senior lender. Additionally, the loan is guaranteed by the Company’s CEO. For the three and nine months ended June 30, 2018, amortization of debt discount amounted to $1,955 and $17,500 and the balance of the note was $250,000. On April 20, 2018, the note matured and all principal and unpaid interest was due immediately. The Company has obtained an amendment from lender changing the maturity to October 20, 2018. The Company recognized a fee of $10,000 related to the amendment which has been recorded as financing expense.



On February 2, 2018, the Company entered into an oral loan agreement with a vendor under which the Company reclassified $579,106 in accounts payable in return for promising to pay the principal amount of $579,106. The loan bears interest at 18% per annum and has a maturity date of October 31, 2018. The loan will be paid in full by the maturity date by making monthly payments of $70,000 from February 28, 2018 to September 30, 2018 and a final balance payment of approximately $63,000 by October 31, 2018. The loan does not have a default interest rate nor prepayment penalties if the note is paid in full or in part. During the nine months ended June 30, 2018 the Company has made five payments of principal and interest and the balance of the note was $261,142.

PAGE 15 on the recent Q.
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