NOTE 6 — NOTES RECEIVABLE, NET

The Company had the following notes receivable from KBL, net as of December 31, 2020 and 2019:

As of December 31, 2019, 180 had loaned $1,699,825 to KBL to fund its operating expenses, deal transaction expenses, and certain financing expenses for the Business Combination. During the year ended December 31, 2020, KBL paid an aggregate amount of $1,203,750 on behalf of 180 in the form of payments to various vendors of 180 and cash paid directly to 180 in order to fund its operations, in partial satisfaction of the Company’s Notes Receivable. The notes did not accrue interest and matured upon the closing of the Business Combination. As of December 31, 2020, the remaining balance of the notes receivable from KBL was eliminated in consolidation as part of the Business Combination with KBL.

The notes receivable from KBL were originally fully reserved because recoverability could not be assured in the event the Business Combination did not close and since the Business Combination was consummated, the reserve was reversed and recovered as of December 31, 2020. During the years ended December 31, 2020 and 2019, 180 recorded bad debt (recovery) expense of ($1,699,825) and $649,825, respectively, related to the notes receivable from KBL, which is included in general and administrative expense on the accompanying consolidated statements of operations and comprehensive loss. The Company recorded $1,050,000 of bad debt expense before the Reorganization, which is not included in these consolidated financial statements.