SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2018

NOTE 11 — SUBSEQUENT EVENTS

Convertible promissory notes

In connection with the October 9, 2015 Note and Warrant Purchase Agreement, in October 2018, the Company issued convertible promissory notes in aggregate principal amount

of $124,975

(the “Notes”) and warrants (the “Warrants”) to

purchase 49,990

shares of common stock of the Company. Subject to the agreement, any investor in the October 9, 2015 Purchase Agreement within the three-year period immediately following the initial closing date, may purchase an additional note in the principal amount equal

to 50%

of the principal amount of the initial note purchased by such investor at previous closings and an additional warrant equal to the principal amount of such additional note divided by the exercise price of the additional warrant

The Note bears interest at 10% and matures the earlier of October 9, 2018 or after the occurrence of an event of default (as defined in the Note). In the event of any conversion, all interest shall be also converted into equity and shall not be payable in cash

. All notes and accumulated interest have been converted by the maturity date

Under the terms of the 2015 Note and Warrant Purchase Agreement, if the Company sells equity securities in a single transaction or series of related transactions for cash of at least $1,000,000 (excluding the conversion of the Notes and excluding the shares of common stock to be issued upon exercise of the warrants) on or before the maturity date, all of the unpaid principal on the Note plus accrued interest shall be automatically converted at the closing of the equity financing into a number of shares of the same class or series of equity securities as are issued and sold by the Company in such equity financing (or a class or series of equity securities identical in all respects to and ranking pari passu with the class or series of equity securities issued and sold in such equity financing) as is determined by dividing (i) the principal and accrued and unpaid interest amount of the Notes by

(ii) 60%

of the price per share at which such equity securities are issued and sold in such equity financing

On October 2, 2018, the Company’s board of directors approved to convert the debt, upon maturity, at $3.75 per share, which is 60% of the price per share at which equity was sold in August 2018.

On October 29, 2018, the Company issued an aggregate of 60,183 shares of its common stock in settlement of notes payable and accrued interest of $224,975 and $712, respectively. In connection with the conversion, the Company incurred a $267,812 loss on settlement of debt.

The Warrants are exercisable at $2.50 per share and expire 5 years following the date of issuance. The Warrants are subject to anti-dilution protection, subject to certain customary exceptions.

Capital lease:

In October 2018, the Company entered into a capital lease for computer equipment for a three year term with payments of $503 per month.