Convertible Notes Payable to Related Parties

12 Months Ended

Dec. 31, 2019

Notes Payable to Related Parties

Convertible Notes Payable to Related Parties

Note 8 – Convertible Notes Payable to Related Parties

In 2019, the Company issued Convertible Promissory Notes totaling 300,000 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 December 2019, the Company issued a Convertible Promissory Note in the principal amount of $25,000 to a stockholder in connection with a loan in the same amount. The note is to be paid in one principal payment, along with any unpaid interest by December 31, 2022. Interest is payable semiannually at 10%. The notes are convertible into common stock at a price of $.20 per share through December 31, 2020, $.30 per share from January 1, 2021 through December 31, 2021, and $.40 per share from January 1, 2022 through the maturity date of December 31, 2022.

Consequently, Convertible Promissory Notes have been issued in an aggregate principal amount of $325,000 in 2019.

Convertible Notes Payable at December 31, 2019 consisted of the following:

	2019
Note payable to stockholders	$	325,000
Less: Unamortized debt issuance costs		18,747
Total long-term debt	$	306,253

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