Note 12 - Subsequent Events

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Subsequent Events [Text Block]

Note

12.

Subsequent Events.

Management has evaluated subsequent events through the date of the filing of this Annual Report and management noted the following for disclosure.

Bellridge Capital Investment

On

April 18, 2019,

we received

$188,000

and issued a

10%

Convertible Note to Bellridge Capital, LP (“Bellridge”) in the principal amount of

$220,000

(the “Bellridge Note”), representing a

10%

original issue discount, and a deduction of

$10,000

for legal fees paid to the investor. The note is due

April 18, 2020.

We and Bellridge concurrently entered into a Securities Purchase Agreement through which, upon our mutual consent, Bellridge

may

invest up to an additional

$400,000

(in

two

tranches) that would be reflected in

two

additional

10%

notes, each of which would mature

one

year from the date of issuance.

The Bellridge Note is convertible at the option of Bellridge at a conversion price equal to

70%

of the lowest closing bid price of the Company’s common stock during the

25

trading days prior to the conversion date. We

may

prepay the Bellridge Note at any time. If we do so up to

90

days after the effective date, the amount due is equal to

125%

of the unpaid principal amount of the note along with any accrued interest, and thereafter, the amount due is

130%

of the unpaid principal amount of the note along with any accrued interest. Upon the occurrence of an event of default, as such term is defined under the Bellridge Note, additional interest will accrue from the date of the event of default at a rate equal to the lesser of

24%

per annum or the highest rate permitted by law.

Crossover Capital Investment

On

May 14, 2019,

we received

$95,000

and issued a Convertible Note to Crossover Capital Fund I, LP (“Crossover Capital”) in the principal amount of

$110,000

(the “Crossover Capital Note”), representing a

10%

original issue discount, and a deduction of

$5,000

for legal fees and due diligence. The note is due

nine

months from the date of issuance. We and Crossover Capital concurrently entered into a Securities Purchase Agreement. The Crossover Capital Note is convertible at the option of the holder at a conversion price equal to

70%

of the lowest closing bid price of the Company’s common stock during the

25

trading days prior to the conversion date. We

may

prepay the Crossover Capital Note up to

180

days after issuance, by paying a prepayment penalty that increases from

5%

within the

first

30

days, to

30%

during the last

30.

Upon the occurrence of an event of default, as such term is defined under the note, additional interest will accrue from the date of the event of default at a rate equal to the lesser of

24%

per annum or the highest rate permitted by law.