Note 6 - Convertible Promissory Notes

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Debt Disclosure [Text Block]

6. CONVERTIBLE PROMISSORY NOTE

July 2019

Note

On

July 23, 2019,

the Company entered into a private placement with the Accredited Investor, pursuant to which the Company issued and sold to such investor an unsecured convertible promissory note in the original principal amount of

$1,000,000

(the

“July 2019

Note”). The

July 2019

Note is convertible into shares of the Company's common stock at a conversion price equal to the lower of (a)

$1.80

per share or (b)

90%

of the closing sale price of the Company's common stock on the date of conversion (subject to a floor conversion price of

$0.50

). The

July 2019

Note bears interest at the rate of

twenty-four

percent (

24%

) per annum and is payable quarterly in arrears. Unless sooner converted in the manner described below, all principal under the

July 2019

Note, together with all accrued and unpaid interest thereupon, will be due and payable

three

years from the date of the issuance on

July 31, 2022.

The following summarizes the

July 2019

Note:

	Maturity Date	Stated Interest Rate		Conversion Price		Face Value		Remaining Debt Discount			Carrying Value
At March 31, 2021	7/31/2022		24%	$	1.80	$	1,000,000	$	(428,000	)	$	572,000
At December 31, 2020	7/31/2022		24%	$	1.80	$	1,000,000	$	(507,000	)	$	493,000

The Company recorded amortization expense of

$80,000

on the

July 2019

Note for the

three

months ended

March 31, 2021

and interest expense of

$60,000

for both the

three

months ended

March 31, 2021

and

2020.