14.	Convertible NOTES PAYABLE

Convertible notes payable as of

September 30, 2020

and

December 31, 2019

consist of the following:

	September 30,		December 31,
	2020		2019

Securities Purchase Agreement dated July 10, 2019	$	-	$	2,255,454
January 2020 Note		-		-
February 2020 Note		-		-
May 2020 Note		-		-
June 2020 Note		-		-
Convertible notes payable, net	$	-	$	2,255,454

Securities Purchase Agreement dated

July 10, 2019

July 10, 2019,

the Company issued a

$3,060,000

principal amount senior secured convertible note (the “Original Note”). At closing, a total of

$2,550,000

was funded. The original issue discount was

$510,000.

The principal amount due of the Original Note was due and payable as follows:

$918,000

was due

180

days after funding,

$1,071,000

was due

270

days after funding, and the remaining balance due

months after the date of funding.

The Original Note was secured by a lien on substantially all of the Company's assets and properties and was convertible at the option of the Investor in shares of common stock at a fixed conversion price of

$1.50

per share.

In connection with the closing of the Original Note, the Company issued a

five

-year warrant to the Investor to purchase

2,000,000

shares of common stock at a fixed exercise price of

$1.50

per share, paid a

$50,000

commitment fee, and issued

266,667

shares of common stock in payment of a

$400,000

due diligence fee. The Company also paid banker fees of

$193,500

and legal fees of

$71,330.

The valuation of the warrant of

$595,662

was recorded to debt discount and was amortized over the life of the Original Note. The fees associated with the agreement were allocated to debt issuance costs and additional paid-in capital based on the respective ratio of the valuation of the note and warrant. Amortization of the debt issuance costs and debt discount are included in interest expense on the statement of operations.

March 12, 2020,

the Company issued a

$3,789,000

principal amount senior secured convertible note (the “Amended Note”), which replaced the Original Note and included an additional

$729,000

in interest due to the debt restructuring. The principal amount was due and payable in full on

April 13, 2020.

The Amended Note was secured by a lien on substantially all of the Company's assets and properties and was convertible at the option of the Investor into shares of common stock at a fixed conversion price of

$0.65

per share. The Company accounted for the transaction as a debt extinguishment, and therefore, the balance of the fees and unamortized discount associated with the Original Note were written off and included as loss on extinguishment of debt. On the day of the conversion, the closing stock price for the day was

$0.76,

which resulted in a beneficial conversion of

$0.11

per share outstanding or

$641,215

to be amortized to interest expense over the term of the Amended Note, as adjusted for any debt conversion.

April 12, 2020,

and

May 6, 2020,

the Company entered into amendments (the “Amendments”) to the Amended Note. The Amendments extended the maturity date to

June 12, 2020

and extended the Investor's right to convert the Amended Note into shares of the Company's common stock at a price of

$0.65

per share through

June 12, 2020.

All other provisions of the Amended Note remained the same.

Until the

second

anniversary of the closing, the investor has the right to purchase up to

20%

of the securities the Company issues in any future private placement, subject to certain exceptions for, among other things, strategic investments.

June 10, 2020,

the investor converted the last of the remaining principal into shares of common stock for payment in full, and the remaining principal balance was

$0.

The Amended Note amount of

$3,789,000

was converted into

5,829,225

shares of common stock.

	September 30,			December 31,
	2020			2019
Principal amount	$	3,789,000		$	3,060,000
Less: conversion of principal into shares of common stock		(3,789,000	)		-
Net Principal amount		-			3,060,000

Less: unamortized debt discount and beneficial conversion feature		-			(574,330	)
Less: unamortized debt issuance costs		-			(230,216	)
Notes payable, net of unamortized debt discount and debt issuance costs	$	-		$	2,255,454

January 2020

Note

January 13, 2020,

the Company issued a

$157,000

principal amount secured

10%

convertible redeemable note (the

“January 2020

Note”) to an institutional investor with a maturity date of

June 13, 2020

which was convertible into common stock at a conversion price of

$1.50

per share. The

January 2020

Note was redeemable at any time by payment of a premium to the principal balance starting at

10%

and increasing to

30%.

At the closing, the Company agreed to issue

650,000

shares of common stock in lieu of payment of a

$75,000

commitment fee which would be reduced to

50,000

shares if the

January 2020

Note was repaid prior to the maturity date. The Company paid

$7,000

of legal fees for the

January 2020

Note.

June 12, 2020,

the

January 2020

Note was paid in full for

$211,984.

The

600,000

shares were returned to the Company in

July 2020.

February 2020

Note

February 13, 2020,

the Company issued a

$126,000

principal amount secured

10%

convertible redeemable note (the

“February 2020

Note”) to an institutional investor with a maturity date of

July 13, 2020

which was convertible into common stock at a conversion price of

$1.15

per share. On

March 12, 2020,

the Original Note was amended to reduce the conversion price to

$0.65

per share, which reduced the conversion price of the

February

Note to

$0.65

and resulted in an additional deemed dividend expense of

$70,998.

The

February 2020

Note was redeemable at any time by payment of a premium to the principal balance starting at

10%

and increasing to

30%.

The Company issued

50,000

shares of common stock to the investor in lieu of payment of a

$57,500

commitment fee. The Company paid

$6,000

of legal fees in connection with the issuance of

February 2020

Note.

This

February 2020

Note was paid in full on

July 10, 2020

by payment of

$170,442.

May 2020

Note

May 6, 2020,

the Company issued a

$2,415,000

principal amount senior secured convertible note (the

“May 2020

Note”). At closing,

$2,100,000

was funded. The principal amount was due and payable in

five

equal monthly installments of

$268,333

beginning

seven

months after the funding date with the remaining balance due on the

twelfth

month after the date of funding. The

May 2020

Note was convertible at a fixed convertible price of

$1.16

per share. In connection with the issuance of the

May 2020

Note, the Company paid a

$133,333

due diligence fee by issuing

114,943

shares of common stock to the Investor priced at

$1.16

per share. The Company also paid a placement fee of

of the gross proceeds to a placement agent. In connection with the closing of the

May 2020

Note, the Company issued a

five

-year warrant to the investor to purchase

1,900,000

shares of common stock at a fixed exercise price of

$1.16

and was immediately exercisable. The valuation of the warrant of

$876,937

was recorded to debt discount and was amortized over the life of the

May 2020

Note. The fees associated with the agreement were allocated to debt issuance costs and additional paid-in-capital based on the respective ratio of the valuation of the note and warrant. Amortization of the debt issuance costs and debt discount were included in the interest expense on the statement of operations.

Following the completion of the underwritten offering consummated in

July 2020,

the principal balance of

$2,415,000

was paid in full during the quarter. As a result of the repayment, the Company expensed the remaining debt discounts and issuance costs of

$1,218,163

July 2020.

June 2020

Note

June 29, 2020,

the Company issued a

$1,811,250

principal amount senior secured convertible note (the

“June 2020

Note”). At closing,

$1,575,000

was funded. The principal amount was due and payable in

nine

equal monthly installments of

$201,250

beginning

four

months after the funding date with the remaining balance due on the

twelfth

month after the date of funding. The

June 2020

Note was convertible at a fixed convertible price of

$1.16

per share. In connection with the issuance of the

June 2020

Note, the Company paid a

$100,000

due diligence fee by issuing

136,575

shares to the Investor priced at

$0.7322

per share. The Company also paid a placement fee of

of the gross proceeds to a placement agent.

In connection with the closing of the

June 2020

Note, the Company issued a

five

-year warrant to the Investor to purchase

1,425,000

shares of common stock at a fixed exercise price of

$1.16

per share, and was immediately exercisable. The valuation of the warrant of

$511,402

was recorded to debt discount and is being amortized over the life of the

June 2020

Note. The fees associated with the agreement were allocated to debt issuance costs and additional paid-in capital based on the respective ratio of the valuation of the note and warrant. Amortization of the debt issuance costs and debt discount are included in interest expense on the statement of operations.

Following the completion of the underwritten offering consummated in

July 2020,

the principal balance of

$1,811,250

was paid in full during the quarter. As a result of the repayment, the Company expensed the remaining debt discounts and issuance costs of

$957,919

July 2020.