8. cONVERTIBLE NOTEs PAYABLE

Convertible notes payable are summarized as follows:

(a) On August 2, 2013, the Company entered into an agreement with seven individual accredited investors, whereby the Company issued separate 6% Secured Subordinate Convertible Notes for a total of $3,000,000 in a private offering and is collateralized by the assets of the Hooters Nottingham restaurant and a subordinate position to all other assets of the Company.

In connection with the Company’s agreement to conduct a capital raise in 2016, the lenders agreed to waive certain existing defaults and extended the original note maturity by eighteen months from December 31, 2016 to June 30, 2018. The Note holders were to receive 10%, pro rata, of the net profit of the Nottingham, England Hooters restaurant, paid quarterly, and 10% of the net proceeds should the location be sold.

The Company entered into a letter of intent for the sale of the Hooters Nottingham facility from which the Company planned to settle a portion of the convertible note. However, the letter of intent has expired. Management is evaluating other alternatives to market the property for sale. (See Note 4 - Assets Held for sale).

Principal and interest under the convertible notes are payable on demand following the maturity on June 30, 2018 are classified as current liabilities on the accompanying condensed consolidated balance sheets.

As of November 13, 2018, the lenders have not demanded payment of principal or unpaid interest, asserted defaults or indicated any imminent action for collection. Management is in discussions with the lenders and intends to enter into an extension or new agreement, but cannot provide assurance that it will be successful in negotiating an extension or new loan or the terms of any new or extended debt.

(b) On February 22, 2018, $200,000 of the Company’s convertible debt was converted into 66,667 shares of Company common stock in accordance with the terms of the convertible debt agreements.