LOAN PAYABLE AND CONVERTIBLE NOTE PAYABLE
In August 2002, the Company received a loan from an unrelated individual (“original holder”) amounting to $180,000. Interest on this loan is $1,050 per month and payable monthly. The loan was due and payable on October 30, 2007. On May 29, 2014, after the debt was assigned to another party (“new holder”), the Company issued a replacement convertible promissory note to the new holder of this debt in the principal amount of $335,850 with due date on August 12, 2017. The new holder is a related party and is controlled by the major shareholder of the Company.
The face amount of the new note reflects the principal and accrued interest of the August 2002 loan payable through March 31, 2014, which was originally due to the old holder and subsequently transferred to the new holder. The convertible promissory note accrues interest at 6% per annum and permits the holder to convert the principal,
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