NOTE 6 - CONVERTIBLE NOTE PAYABLE

6 Months Ended

Jun. 30, 2019

Disclosure Text Block [Abstract]

NOTE 6 - CONVERTIBLE NOTE PAYABLE

NOTE 6 – CONVERTIBLE NOTE PAYABLE

On June 15, 2018 the Company entered into a Securities Purchase Agreement with an accredited investor, under which the investor purchased a Secured Convertible Promissory Note from the Company in the principal amount of $100,000. Under the terms of the Note simple interest will accrue at a rate of 10% per annum. The note will automatically mature and be due and payable on the eighteen (18) month anniversary. The Company shall make principal payments under the Note in the amount of $5,000 per month, beginning on the seventh month anniversary and continuing each month thereafter through the maturity date. Also commencing on the seventh month anniversary of the Note, the Company shall make interest payments under this Note based on the unpaid principal balance. The Note is secured by the inventory of the Company in accordance with a Security Agreement executed concurrently with the Note and UCC-1 Financing Statement perfecting said security interest. The Note includes a conversion feature wherein, under certain circumstances, the Lender may request that a portion of the principal repayment be converted and payable in restricted shares of the Company’s Common Stock at the lesser of five cents

($0.05) per share or 90% of the average closing price calculated over the prior 20 trading days, but not less than $0.025 per share. The floor of $0.025 per share prevents the embedded conversion option from qualifying for derivative accounting under ASC 815-15 “Derivative and Hedging”.

As of June 30, 2019 and December 31, 2018 Convertible Note Payable consisted of the following:

	June 30,			December 31,
	2019			2018
Convertible note payable		$	70,000		$	100,000
Total		$	70,000		$	100,000