	Principal Amount		Interest Rate			Maturity Date	Conversion Rate
Current promissory notes
Secured, convertible note	$	44,546		11.5	%	11/30/18 (1)	$	1.254
Secured note		250,000		11.5	%	4/30/17 (2)	$	1.254
Unsecured, convertible note		250,000		6.5	%	4/30/17 (2)	$	1.254
Unsecured, convertible note		500,000		6.5	%	4/30/17 (2)	$	1.254
Total promissory notes	$	1,044,546

(1)

On October 21, 2016, the Company and the holder of this note mutually agreed to amend the note by: (i) extending the maturity date from April 12, 2016 to October 31, 2017; (ii) continuing the interest rate at 11.5% per annum through the new maturity date; (iii) obligating the Company to make monthly payments on the note of $10,000 per month beginning in November 2016; and (iv) adding a conversion feature to the note that allows the note holder to convert the unpaid balance due under the note into shares of the Company’s common stock at a conversion rate of $6.40 per share.

On July 17, 2017, the Company and the holder of this note mutually agreed to further amend the note by: (a) extending the maturity date from October 31, 2017 to November 15, 2017; (b) granting to the holder of the note a right to convert the entire outstanding unpaid balance of the note, including any unpaid accrued interest thereon, into shares of the Company’s common stock at a conversion rate

of $

3.00 per share through November 15, 2017; and (c) tolling the Company’s obligation to make monthly payments on the note until after November 15, 2017.

On February 27, 2018, the Company and the holder of this note mutually agreed to further amend the note by: (a) extending the maturity date from November 15, 2017 to April 30, 2018; and (b) further tolling the Company’s obligation to make monthly payments on the note until after April 30, 2018, at which time, the maturity date was further extended and the Company was to resume making payments of $10,000 per month until the note is paid in full.

In August 2018, the Company and the holder of this note mutually agreed to further amend the note by: (a) extending the maturity date from April 30, 2018 to November 30, 2018; (b) granting to the holder of the note a right to convert the entire outstanding unpaid balance of the note, including any unpaid accrued interest thereon, into shares of the Company’s common stock at a conversion rate of $3.00 per share through November 30, 2018; and (c) tolling the Company’s obligation to make monthly payments on the note until after November 30, 2018, at which time, the maturity date will be further extended and the Company will resume making payments of $10,000 per month until the note is paid in full.

(2)

In March 2017, the Company and the holder of these notes mutually agreed to extend the maturity dates of these notes to April 30, 2017, thus curing the technical default of the notes that had occurred on the prior maturity dates of May 11, 2016 for the secured note and April 15, 2016 for the unsecured notes. As of September 30, 2018, these notes were once again in technical default. However, the note holder has not declared an event of default. The Company is attempting to further extend the maturity dates on these notes. However, the Company gives no assurance that an agreement to extend such maturity dates will be achieved.

The convertible promissory notes and related accrued interest are convertible into shares of the Company’s common stock at the indicated conversion rates. The secured notes have a security interest in all of the personal property and other assets of the Company. The note discounts resulting from warrants issued with the notes and any beneficial conversion features inherent in the convertible notes, were fully amortized prior to 2016.

In August 2018, the

Company offered to each of the debt holders listed above, and to the related party investors described in “

Due to Investors

” below, the right to convert their debt and the accrued interest thereon into shares of the Company’s common stock at the rate

of $1.254

per share. This conversion right was conditioned upon the Company successfully amending its Articles of Incorporation to increase the number of authorized shares to accommodate such conversions, which occurred on November 6, 2018. Therefore, this right became effective on November 6, 2018 and will expire 30 days thereafter, on December 6, 2018. As of November 13, 2018, no debt holders had accepted the Company’s offer to convert their debt into equity

The Company has a bank line of credit with a credit limit of $100,000. This line of credit has an annual interest rate of prime plus 6.75% and requires monthly payment of any interest due plus approximately 1% of the outstanding balance. At September 30, 2018 and December 31, 2017, the outstanding balance due on the bank line of credit was $61,574 and $65,625, respectively.

The amount shown in the condensed consolidated balance sheets as due to investors represents short-term loans made to the Company by related party investors (see NOTE 5 – RELATED PARTY TRANSACTIONS – Due to Investors). The terms of these loans have not yet been determined. However, the Company is accruing interest on the outstanding balance of the loans at a rate of 10%

per annum, which, based on discussions with the related party investors, management believes will approximate the final negotiated rate