Note 6 - Convertible Notes Payable and Other Related Party Notes Payable

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Convertible Notes Payable and Other Related Party Notes Payable

Convertible Notes Payable and Other Related Party Notes Payable. As of December 31, 2020, the amount of convertible debt principal, on the Company’s balance sheet was $953,001. The total balance of the principal for convertible promissory notes as of March 31, 2021, is $915,016. This amount consisted of the following convertible promissory notes payable to Dr. Stephen T. Chen, Chairman, CEO, President, and CFO, and i2China, a consultant, as shown in the table below.

Note #.	Conversion Rate				Interest Rate				March 31, 2021		December 31, 2020
Note 1 - Chen	$	0.1680				0.75	%		$	114,026	$	114,026
Note 2 - Chen	$	0.1875				0.65	%		$	262,500	$	262,500
Note 3.19 - Chen	$	0.2500				1.85	%		$	39,620	$	39,620
Note 4.19 - Chen	$	0.2500				1.61	%		$	14,879	$	14,879
Note 5.19 – i2China	$	0.2500				1.85	%		$	16,000	$	16,000
Note 6.20 - Chen	$	0.2500				1.85	%		$	216,600	$	216,600
Note 7.20 - Chen	$	0.2500				1.60	%		$	23,366	$	23,366
Note 8.20a – i2China	$	0.2500				1.85	%		$	48,000	$	48,000
Note 8.20b – i2China	$	0.2500				1.85	%		$	84,000	$	84,000
Note 9.21 - Chen		N/A				0.13	%		$	236,854	$	134,010
Note 10.21 – Chen	$	0.2500				1.85	%		$	59,025		-
Note 11 – i2China	$	0.2500				1.85	%		$	37,000		-
Total Convertible Notes (including accrued Interest) – Related Party			$	1,151,870			$	953,001

Dr. Stephen T. Chen, Chairman, CEO, President, and CFO, and i2China Management Group, LLC, the Company’s management consultant, elected to defer cash compensation during a period of development and fundraising. The parties received convertible promissory notes in consideration of the deferrals.

On January 1, 2020, the Company issued Note #6.20 for deferred compensation to Dr. Stephen T. Chen, Chairman, CEO, President, and CFO, in the amount of $216,600, the maximum amount of cash compensation that could be deferred for 2020. The Note is payable on January 1, 2021, or on demand and bears interest at the AFR1 short-term rate of 1.85%. The note is an advancing note with a maximum limit of $216,600 whereby the Company promises to repay the aggregate Principal Amount advanced to date up to the stated maximum amount at Maturity.

The Company may request and the payee shall advance up to $9,025 on the 15th and last day of each month until the note matures. The Note may be convertible in whole or in part at a conversion price of $0.25 per share into the Company’s common voting stock. All shares issued are to be restricted subject to Rule 144 promulgated under the U.S. Securities Act of 1933. The Company may prepay the Note in whole or in part at any time without penalty.

On January 1, 2020, the Company issued Note #7.20 to Dr. Stephen T. Chen for deferred reimbursement of expenses advanced on behalf of the Company for $30,000, the maximum amount of reimbursable expense that could be deferred. Actual reimbursable expenses deferred is $23,366. The Note is payable on January 1, 2021, or on demand and bears interest at the AFR1 short-term rate of 1.60%. The note is an advancing note with a maximum limit of $30,000 whereby the Company promises to repay the aggregate Principal Amount advanced to date up to the stated maximum amount at Maturity. The Company may request and the payee shall advance against the Note, until Maturity, the amount submitted on a completed and approved reimbursement form along with documentation of the amount to be advanced. The Note may be convertible in whole or in part at a conversion price of $0.25 per share into the Companuy’s common voting stock. All shares issued are to be restricted subject to Rule 144 promulgated under the U.S. Securities Act of 1933. The Company may prepay the Note in whole or in part at any time without penalty.

On January 1, 2020, the Company issued Note #8.20 for deferred compensation to i2China Management Group, LLC in the amount of $48,000, the maximum amount of cash compensation that could be deferred in 2020. The Note is payable on January 1, 2021, or on demand and bears interest at the AFR1 short-term rate of 1.85%. The note is an advancing note with a maximum limit of $48,000 whereby the Company promises to repay the aggregate Principal Amount advanced to date up to the stated maximum amount at Maturity. The Company may request and the payee shall advance up to $4,000 on the last day of each month until the note matures. The Note may be convertible in whole or in part at a conversion price of $0.25 per share.

On January 1, 2021, the Company issued Note #10.21 for deferred compensation to Dr. Stephen T. Chen, Chairman, CEO, President, and CFO, in the amount of $59,025. The Note is payable on April 1, 2021, or on demand and bears interest at the AFR short-term rate of 1.85%. The note is an advancing note with a maximum limit of $59,025 whereby the Company promises to repay the aggregate Principal Amount advanced to date up to the stated maximum amount at Maturity. The Company may request and the payee shall advance up to $9,025 on the 15th and last day of each month until the note matures. The Note may be convertible in whole or in part at a conversion price of $0.25 per share into the Company’s common voting stock.

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1 Applicable Federal Rate -theminimum interest rate that the Internal Revenue Service (IRS) allows for private loans. The IRS publishes a monthly set of interest rates that the agency considers the minimum market rate for loans, whereas, interest rates less than the AFR would have tax implications.

On January 1, 2021, the Company issued Note #11 for deferred compensation to i2China Management Group, LLC in the amount of $37,000. The Note is payable on April 1, 2021, or on demand and bears interest at the AFR1 short-term rate of 1.85%. The note is an advancing note with a maximum limit of $37,000 whereby the Company promises to repay the aggregate Principal Amount advanced to date up to the stated maximum amount at Maturity. The Company may request and the payee shall advance up to $11,000 on the last day of each month until the note matures. The Note may be convertible in whole or in part at a conversion price of $0.25 per share.

The notes are unsecured and are due on demand. All shares issued on conversion are to be restricted subject to Rule 144 promulgated under the U.S. Securities Act of 1933. The Company may prepay the notes in whole or in part at any time without penalty. The convertible notes due to Dr. Chen are related party notes.