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Note 10 - Convertible Notes Payable
 6 Months Ended
Jun. 30, 2019
Notes to Financial Statements  
Debt Disclosure [Text Block]
10.
Convertible NOTES PAYABLE
 
On
April 4, 2019, 
the Company issued a
$550,000
secured convertible debenture which matures
November 15, 2019
and is convertible into common stock at a conversion price of
$1.50
per share. The note
may
be redeemed at any time by payment of a premium to the principal balance starting at
5%
and increasing to
25%.
  The note was issued at approximately
7%
(
$40,000
) original issue discount.  Subject to the mutual agreement of the Company and the investor, the Company
may
purchase
two
additional
$550,000
principal amount note on the same terms after
45
day intervals from the prior issuance, for an additional potential net proceeds of
$1,020,000.
  The convertible note contains anti-dilution protections if the Company issues shares of common stock for less than the conversion price. The convertible note was secured substantially by all the assets of the Company.  At the closing, the Company issued
80,000
shares of common stock in payment of a
$120,000
commitment fee and is obligated to issue
10,000
shares of common stock monthly in payment of a monthly commitment fee of
$15,000
until the earlier of
November 1, 2019
or the repayment or conversion of the note.
 
On
June 14, 2019, 
the Company issued a
$157,000
secured
10%
convertible redeemable note which matures
November 14, 2019
and is convertible into common stock at a conversion price of
$1.50
per share. The convertible redeemable note contains anti-dilution protections if the Company offers a conversion discount or other more favorable conversion terms while the note is in effect.  The note
may
be redeemed within the
first
five
months by payment of a premium to the principal balance starting at
10%
and increasing to
30%
of principal plus interest.  At the closing, the Company issued
200,000
shares of common stock in lieu of payment of a
$30,000
commitment fee. If the note is repaid prior to the maturity date,
180,000
of the shares shall be returned to the Company.
 
Both notes were repaid on
July 10, 2019.
 
For the
two
notes issued during the
second
quarter of
2019,
the Company issued a total of
300,000
shares of common stock, amounting to
$450,000
in commitment fees. Of these amounts,
$180,000
was recorded as an offset to notes payable – debt issuance costs and is amortized over the life of the loan.   The return of commitment fee in amount of
$270,000
(
180,000
shares) was recorded as a reduction in additional paid in capital and shares were returned to the Company on
July 10, 2019.
The Company also incurred
$17,000
of legal fees withheld from proceeds which was also recorded as an offset to notes payable – debt issuance costs and amortized over the life of the loan. Amortization of the debt issuance costs and debt discount are included in interest expense on the statement of operations. 
 
Convertible notes payable, net of unamortized debt discount and debt issuance costs at
June 30, 2019
consist of:
 
Principal amount
   $
707,000
  
Less unamortized debt discount
    
(24,533
 )
Less unamortized debt issuance costs
    
(140,800
 )
Notes payable, net of unamortized debt discount and debt issuance costs
   $
541,667