Note 6. Notes Payable – Related Parties

During July 2016 through October 2016, the Company obtained three short-term loans in the aggregate amount of $150,000 in exchange for promissory notes bearing 10% interest per annum, which principal shall be due and payable, upon demand of the payee. Notwithstanding, at the holder’s sole discretion, the holder has the right to convert all or any portion of the then unpaid principal and interest balance into shares of the Company’s common stock at a conversion price of $0.08 per share. On each respective date of issuance, the conversion price of each of the promissory notes was less than the market price of the Company’s common stock. This resulted in a beneficial conversion feature in the aggregate amount of $117,500, which was treated as a discount to each of the promissory notes and amortized over the term of each respective promissory note. Subsequent to the issuance of the notes, affiliates of the noteholders entered into the Stock Purchase Agreement with the Company (See Notes 1 and 11).

Notes payable – related parties consisted of the following:

	December 31, 2017			December 31, 2016
Notes Payable originating July 15, 2016; no monthly payments required; bearing interest at 10%; due on December 31, 2016, convertible on demand	$	50,000		$	50,000
Notes Payable originating August 23, 2016; no monthly payments required; bearing interest at 10%; due on December 31, 2016, convertible on demand		50,000			50,000
Notes Payable originating October 19, 2016; no monthly payments required; bearing interest at 10%; due on December 31, 2016, convertible on demand		50,000			50,000
Total		150,000			150,000
Less: current maturities		(150,000	)		(150,000	)
Amount due after one year	$	-		$	-

During the year ended December 31, 2017 and 2016, interest expense of $27,000 and $13,587 (of which $13,094 was related to the amortization of the beneficial conversion feature), respectively, was recognized on outstanding notes payable – related parties. As of December 31, 2017, and 2016, accrued interest payable was $32,096 and $5,096, respectively, which is included in accrued expenses on the accompanying consolidated balance sheets.