Convertible Notes Payable to Related Parties

6 Months Ended

Jun. 30, 2019

Notes Payable to Related Parties

Convertible Notes Payable to Related Parties

Note 8 - Convertible Notes Payable to Related Parties

In the first quarter of 2019, the Company issued Convertible Promissory Notes totaling $290,000 to stockholders. The notes are to be paid in one principal payment, along with any unpaid interest by December 31, 2021. Interest is payable semiannually at 10%. The notes are convertible into common stock at a price of $.20 per share through December 31, 2019, $.30 per share from January 1, 2020 through December 31, 2020, and $.40 per share from January 1, 2021 through the maturity date of December 31, 2021.

In May 2019, the Company issued a Convertible Promissory Note in the principal amount of $10,000 to a stockholder in connection with a loan in the same amount. Consequently, Convertible Promissory Notes have been issued in an aggregate principal amount of $300,000 during the first two quarters of 2019.

Long-term debt at June 30, 2019 consisted of the following:

	2019
Note payable to stockholders	$	300,000
Less: Unamortized debt issuance costs		21,004
Total long-term debt	$	278,996

Amortization of the debt issuance costs is reported as interest expense in the income statement.