10. Related Party Transactions

During February 2018, we commenced an offer to certain investors, officers and directors of the Company of up to $750,000 in Unsecured Promissory Notes (individually, a “Note” and collectively, the “Notes”). Each Note bears interest on the unpaid balance at the rate of fifteen percent (15%) per annum and the principal and accrued interest is due and payable no later than March 31, 2020. The Company may prepay any of the Notes without notice, subject to a two percent (2%) pre-payment penalty.  As of December 31, 2018, the Note investments of $1,080,000 have been received from certain investors, officers and directors of the Company.  The Note offer was conducted by our management and there were no commissions paid by us in connection with the solicitation.

During the six months ended June 30, 2019, we issued to one of our directors, unsecured notes in the principal aggregate amount of $2,500,000, which are due and payable in the first two quarters of 2021. These notes bear interest on the unpaid balance at the rate of fifteen percent (15%) per annum. The Company may prepay any of the Notes without notice, subject to a two percent (2%) pre-payment penalty. As noted in subsequent events, we conducted a private placement of our securities in July 2019. The note holder participated in the private placement described in Note 11, by converting all principal and accrued interest under the notes, totaling $3,082,916, into 3,082,916 units of our securities, with each unit consisting of one share of our common stock and a warrant to purchase to one-half share of our common stock at an exercise price of $1.25 per share.