Quarterly report pursuant to Section 13 or 15(d)

Notes Payable and Long-Term Debt - Related Party

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Notes Payable and Long-Term Debt - Related Party
6 Months Ended
Jun. 30, 2017
Debt Disclosure [Abstract]  
Notes Payable and Long-Term Debt - Related Party

5 NOTES PAYABLE AND LONG-TERM DEBT – RELATED PARTY

 

As of June 30, 2017 and December 31, 2016, notes payable and long-term debt due to a related party consists of:

 

    June 30, 2017     December 31, 2016  
Note payable to director due in four equal annual installments of $26,875 on April 28 of each year     107,500       107,500  
Less debt discount     -       -  
      107,500       107,500  
Less current portion - related party     80,625       53,750  
Long-term debt - related party   $ 26,875     $ 53,750  

 

The payment due April 28, 2016 has not been made. Pursuant to the terms of the note, the note begins to accrue interest at 6% per annum and the past due portion is convertible into the Company’s common stock at a conversion price equal to 70% of the current price of the common stock. The Company has determined that the conversion feature for the past due portion of the note constitutes a derivative which has been bifurcated from the note and recorded as a derivative liability, with a corresponding discount recorded to the note. Accrued interest was $1,088 at December 31, 2016 and $2,166 at June 30, 2017.