NOTES PAYABLE-RELATED PARTIES
|6 Months Ended|
Jun. 30, 2021
|NOTES PAYABLE-RELATED PARTIES|
|NOTE 11 - NOTES PAYABLE-RELATED PARTIES||
NOTE 11 - NOTES PAYABLE-RELATED PARTIES
As of June 30, 2021 and December 31, 2020, the Company had advances from Kent Emry (Chairman of the Company). The balance outstanding as of June 30, 2021 and December 31, 2020 was $1,500.
The Company issued to Joe Galligan (a holder of between 5% and 10% of the Company’s shares of common stock who became a member of the Board on February 16, 2021) one unsecured promissory notes of $125,000 bearing interest at 8% per annum with both principal and initially interest due July 26, 2018. In connection with the note issuance, the Company issued 50,000 shares of the Company’s common stock to Joe Galligan. The fair value of the common stock at the date of issuance of $12,750 was recorded as a debt discount and is amortized as interest expense over the term of the note. During 2019 and 2020 the note was extended three times, ultimately rendering the note due on demand. The balance outstanding as of June 30, 2021 and December 31, 2020 was $125,000.
On January 22, 2013, the Company issued an unsecured promissory note payable to Kent Emry (Chairman of the Company) for $200,000 due January 1, 2018, with a stated interest rate of 12% per annum beginning three months from issuance, payable monthly. Principal payments were due starting February 1, 2015 at $6,650 per month. The lender has an option to convert the note to licensing rights for the State of Oregon. The Company currently is in default of the principal and interest. The note holder subsequently became an officer of the Company and a member of the Board. While the note holder remains a member of the Board, he has not been an officer of the Company since June 2016. The balance outstanding as of June 30, 2021 and December 31, 2020 was $163,610.
The interest expense during the three months and six months ended June 30, 2021 were $7,425 and $14,769, respectively. The interest expense during the three months and six months ended June 30, 2020 were $7,426 and $14,851, respectively. As of June 30, 2021 and December 31, 2020, the accumulated interest on related parties notes payable was $170,537 and $155,768, respectively, and was included in AP & Accrued expenses on the balance sheet.