LONGTERM CONVERTIBLE NOTES PAYABLE

6 Months Ended

Jun. 30, 2021

LONGTERM CONVERTIBLE NOTES PAYABLE

5. LONG-TERM CONVERTIBLE NOTES PAYABLE

5. LONG-TERM CONVERTIBLE NOTES PAYABLE

As discussed in Note 3, on January 7, 2021, the Company issued two long-term convertible notes payable each in the principal amount of $500,000 in conjunction with the business acquisition of SCS LLC.  The Assigned Notes bear interest at an annual rate of 0.39% and mature on January 7, 2026.  The Assigned Notes were discounted to a principal balance of $645,095 using an interest rate of 9.54% and a debt discount of $354,905 was recorded at inception.  Amortization of the discount to interest expense was $27,521 during the six months ended June 30, 2021, resulting in a debt discount of $327,384 as of June 30, 2021,

At any time after December 31, 2021, each month, each holder of the Assigned Notes may convert the principal amount of the Assigned Note into a number of shares of the Company’s common stock not exceeding 5% of the total trade volume of the Company’s common stock publicly reported for the previous calendar month at a conversion price of $0.013 per share. Each Assigned Note also imposes an overall limitation on the number of conversions to common stock that the holder may affect such that it prohibits the holder from beneficially owning more than 4.99% of the total issued and outstanding common stock of the Company at any time that the Assigned Note is outstanding