In November 2015, the Company entered into a loan agreement with a financing company for $207,750 to finance one of the Company’s insurance policies. The terms of the loan stipulated equal monthly payments of principal and interest payments of $23,397 over a nine-month period. Interest on this loan was accrued at an annual rate of 3.25%. This loan was fully repaid in July 2016.

In October 2016, the Company entered into a loan agreement with a financing company for $348,750 to finance one of the Company’s insurance policies. The terms of the loan stipulate equal monthly payments of principal and interest payments of $39,114 over a nine-month period. Interest accrues on this loan at an annual rate of 2.25%. Prepaid expenses as of June 30, 2017 and December 31, 2016, included $146,250 and $378,750, respectively, related to this insurance policy.

For three months ended June 30, 2017 and 2016, interest expense for notes payable totaled $602 and $567, respectively. For six months ended June 30, 2017 and 2016, interest expense for notes payable totaled $1,879 and $1,697, respectively.

Notes payable consisted of the following: