Quarterly report pursuant to Section 13 or 15(d)

3. Notes Payable

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3. Notes Payable
9 Months Ended
Sep. 30, 2019
Debt Disclosure [Abstract]  
Notes Payable

Note 3 –Notes Payable

 

Convertible Notes Payable

 

On June 14, 2018, the Company entered into an agreement to issue a 10% convertible note in an aggregate of $300,000 in principal amount of convertible notes, which principal and accrued interest automatically converted into shares of common stock upon the closing of a public offering at a conversion rate of $1.50 per share. In conjunction with this convertible note payable a placement fee of 14,000 warrants were issued. The warrants have a 5-year life and an exercise price of $1.50. These warrants were recorded for $15,163 as a debt discount. In addition, $21,000 of placement agent fees were paid related to this note which was also recorded as a debt discount. As of September 30, 2019, the discount was fully amortized. On November 13, 2019, upon the closing of the IPO, the 10% convertible note of $300,000 in principal plus accrued interest of $42,494 automatically converted into 228,329 shares of common stock at a conversion rate of $1.50 per share.

 

Notes Payable

 

During 2017, the Company issued two notes payable for total cash proceeds of $35,000. The notes bore interest at the rate of 10% per year and originally matured on January 31, 2018. Prior to maturity, the notes were extended through September 30, 2018, and again extended through December 31, 2018. The notes and accrued interest were paid in full in January 2019.