4.	Convertible Promissory Note

January 29, 2019,

the Company agreed to issue and sell an unsecured note payable for an aggregate of

$800,000

face value (the

“January 2019

Note”) that, after

six

months, is convertible into shares of the Company's common stock at a conversion price equal to the lower of (a)

$1.80

per share or (

)

90%

of the closing sale price of the Company’s common stock on the date of conversion (subject to a floor conversion price of

$0.50

The

January 2019

Note bears interest at the rate of

twenty-four

percent (

24%

) per annum and is payable quarterly in arrears. Unless sooner converted in the manner described below, all principal under the

January 2019

Note, together with all accrued and unpaid interest thereupon, will be due and payable

eighteen

(

) months from the date of the issuance of the

January 2019

Note. The

January 2019

Note

may

be prepaid without penalty at any time after it becomes convertible (at which time the holder will have the right to convert it before prepayment thereof).

On the date that is

six

months after the issuance of the

January 2019

Note, and for so long thereafter as any principal and accrued but unpaid interest under the

January 2019

Note remains outstanding, the holder of the

January 2019

Note

may

convert such holder’s

January 2019

Note, in whole or in part, into a number of shares of Company common stock equal to (i) the principal amount being converted, together with any accrued or unpaid interest thereon, divided by (ii) the conversion price in effect at the time of conversion. The

January 2019

Note has customary conversion blockers at

4.99%

and

9.99%

unless otherwise agreed to by the Company and the holder. It was concluded that the conversion option did contain a beneficial conversion feature and the Company recorded a debt discount in the amount of

$800,000,

upon stockholder approval of the conversion feature on

May 30, 2019.

The discount represented the fair value of the incremental shares up to the proceeds received from the convertible note. The Company amortized

$57,000

and of the debt discount to interest expense for the

three

and

six

months ended

June 30, 2019,

respectively.

The

January 2019

Note contains customary events of default, including the suspension or failure of the Company’s common stock to be traded on a trading platform, the Company’s failure to pay interest or principal when due, or if the Company files for bankruptcy or takes some other similar action for the benefit of creditors. In the event of any default under the

January 2019

Note, the holder

may

accelerate all outstanding interest and principal due on the

January 2019

Note.