Note 8 – Loans from Parent and Other Related Party Transactions

To fund the Company’s operations for the six months ended June 30, 2023, the former Parent advanced funds and paid expenses of InnovaQor and the Group in the amount of $876,998 (Non-interest bearing). The amounts as of June 30, 2023, and December 31, 2022 are included in Due to Former Parent and Notes Payable in the accompanying Condensed Consolidated Balance Sheets.

The Company has a loan payable to its former Parent in the amount of $1,457,253 at June 30, 2023. The loan had a 10% Original Issue Discount in the amount of $132,498 which is fully amortized as of June 30, 2023, the due date of the loan. The loan has a default interest rate of 18%.

On August 9, 2023, the Company and Rennova mutually agreed to modify the promissory note to extend the maturity date from June 30, 2023 to December 31, 2023 and to provide for additional interest in the form of 5% of the principal amount to be added to the amount payable under the note.

During the year ended December 31, 2022, Ms. Hollis, the former Chief Executive Officer of the Company, loaned the Company $96,100. The Company entered into promissory notes in the amount of $105,710, representing a 10% original issue discount. During the year ended December 31, 2022, $13,000 of these loans was repaid. A payment of $93,010, representing full payment of the loan including interest outstanding, was made by the Company on May 12, 2023. In addition, the Company issued Ms. Hollis 25 shares of Series C-1 Preferred Stock on March 31, 2022, in connection with one of the loans. These shares of Series C-1 Preferred Stock were valued at $15,250 using the Option Price Method and the same assumptions as used to value the prior issuance of Series C-1 Preferred Stock.

The above amounts are not indicative of what third parties would have agreed to.

Related Parties Transactions

Included in net revenues for the three months ended June 30, 2023 and 2022 is $96,876 and $47,788, respectively, of related party revenue with Rennova (the former parent).

Included in net revenues for the six months ended June 30, 2023 and 2022 is $181,579 and $102,267, respectively, of related party revenue with Rennova (the former parent).

The Group has incurred certain costs that have been allocated from Rennova. Included in the Consolidated Statements of Operations are the following allocated costs:

Schedule of Allocated Costs