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Notes Payable

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

NOTES PAYABLE

NOTE 6 – NOTES PAYABLE

The following table outlines the Company's notes payable as of September 30, 2019 and December 31, 2018:

		September 30, 2019				December 31, 2018
Convertible notes in the principal aggregate amount of $450,000 issued in May of 2018. These notes have a maturity date of May 28, 2019 and accrue interest at a rate of 12% compounded annually. The conversion price for these notes is $0.23 per share of common stock, subject to adjustment. The borrowers have converted $344,642 of these notes including $9,922 of interest as of September 30, 2019 and December 31, 2018.		$	170,280			$	215,280
Promissory note in the principal aggregate amount of $230,000 issued in October of 2018. This note has a maturity date of April 1, 2019 and bears no interest. The Company has recorded $0 and $12,000 as accrued interest as of June 30, 2018 and December 31, 2018, respectively. This note was repaid on April 1, 2019.			—				200,000
The Company issued convertible notes in the principal aggregate amount of $1,291,000 in August of 2019 to three accredited investors. These notes have a maturity date of August 15, 2020 and accrue interest at 12% per annum. The conversion price for these notes is $0.23 per share of common stock, subject to quarterly adjustment pursuant to the terms therein.			1,291,500				—
Related party promissory note of $106,000 issued in December of 2018. This note has a maturity date of March 1, 2019 and bears no interest, but requires an additional $6,000 from the original $100,000 received. The Company has recorded $9,000 as accrued interest as of March 31, 2018.			—				50,000
Warrants to purchase up to 2,391,305 shares of common stock with an exercise price of $0.28 per share. The fair value of the warrants was determined to be $533,691 and was recorded as a debt discount to be amortized over the life of the note.			—				(217,864	)
The Company issued convertible notes in the principal aggregate amount of $1,291,000 in August of 2019 to three investors at a 20% discount to the convertible note amount which resulted in a discount of $215,250. In conjunction with the convertible notes, the Company issued warrants to purchase up to 4,612,500 shares of common stock with an exercise price of $0.28 per share. The fair value of the warrants was determined to be $569,147. The Company paid debt issuance costs paid $61,583 in connection with the new note financing on August 15, 2019. For the three months ended September 30, 2019, the Company recognized amortization of $106,584.			(739,133	)			—
Total Net Debt		$	722,647			$	247,416

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- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

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