PROMISSORY NOTES PAYABLE	6 Months Ended
Jan. 31, 2021
Notes to Financial Statements
PROMISSORY NOTES PAYABLE	8. PROMISSORY NOTES PAYABLE SHORT-TERM NOTES PAYABLE On June 9, 2020, the Company issued a short-term unsecured convertible promissory note in the amount of $25,000, with interest at 12% interest per annum and maturing on September 7, 2020. The unsecured convertible promissory note was convertible into shares of common stock of the Company at $0.20 per share, which was in excess of the closing market price of the Company’s common stock on June 9, 2020 of $0.07 per share. On August 31, 2020, the principal balance of the unsecured convertible promissory note of $25,000, plus accrued interest payable of $682, was repaid through conversion into 128,410 shares of common stock. On October 29, 2020, the Company issued a short-term unsecured promissory note to Daniel Crosser, who is an approximate 13% shareholder of the Company, in the amount of $100,000, with interest at 10% per annum. The note matures on April 29, 2021, with the principal balance outstanding, plus accrued but unpaid interest, being due and payable on the maturity date. As of January 31, 2021, accrued interest related to the unsecured promissory note was $2,611. On November 10, 2020, the Company issued a short-term unsecured promissory note to Daniel Crosser, who is an approximate 13% shareholder of the Company, in the amount of $200,000, with interest at 5% per annum. The note was scheduled to mature on February 8, 2021, with the principal balance outstanding, plus accrued but unpaid interest, being due and payable on the maturity date. As of January 31, 2021, accrued interest related to the unsecured promissory note was $2,236. On February 8, 2021, the maturity date of this note was extended to June 30, 2021. On December 10, 2020, the Company issued a short-term unsecured promissory note to Daniel Crosser, who is an approximate 13% shareholder of the Company, in the amount of $160,000, with interest at 5% per annum. The proceeds under this promissory note were received by the Company in November 2020. The note was scheduled to mature on March 10, 2021, with the principal balance outstanding, plus accrued but unpaid interest, being due and payable on the maturity date. As of January 31, 2021, accrued interest related to the unsecured promissory note was $1,518. On February 26, 2021, the maturity date of this note was extended to June 30, 2021. On December 21, 2020, the Company issued a short-term promissory note to Daniel Crosser, who is an approximate 13% shareholder of the Company, in the amount of $40,000, without interest, with a scheduled maturity date of January 31, 2021. On January 31, 2021, the maturity date of this note was extended to June 30, 2021. On December 23, 2020, the Company issued a short-term promissory note to John Morgan, an officer of the Company, in the amount of $20,000, without interest. The note was repaid on January 7, 2020. Between December 15, 2020 and December 26, 2020, the Company’s subsidiary Mistress Movie LLC issued six short-term promissory notes to Cross Entertainment, LLC, a related party, aggregating $170,000, without interest, with a scheduled maturity date of February 28, 2021. As of January 31, 2021, $60,000 had been repaid and the remaining principal amount of $110,000 was due on these notes. On February 26, 2021, the maturity date of the $110,000 principal amount of the notes were extended to June 30, 2021. On December 26, 2020, the Company issued a short-term promissory note to Cross Entertainment, LLC, a related party, in the amount of $110,000, without interest, with a scheduled maturity date of June 30, 2021. The Company received proceeds of $10,000 on this note through January 31, 2021. On January 31, 2021, the balance of the January 7, 2021 note of $85,000 was transferred to this note. As of January 31, 2021, a principal amount of $95,000 was due on this note. On January 5, 2020, the Company issued a short-term promissory note to Lawrence M. Silver, who is an approximate 9% shareholder of the Company, in the amount of $70,000, without interest, with a scheduled maturity date of January 31, 2021. On January 31, 2021, the maturity date of this note was extended to June 30, 2021. On January 7, 2021, the Company issued a short-term promissory note to Cross Entertainment, LLC, a related party, in the amount of $145,000, without interest, with a scheduled maturity date of January 31, 2021. Proceeds on this note were $145,000, of which $60,000 was repaid and the balance of $85,000 was transferred to the December 26, 2020 note as described above. As of January 31, 2021, there was no amounts due and payable on this note. On January 29, 2021, the Company issued a short-term promissory note to Cross Entertainment, LLC, a related party, in the amount of $85,000, without interest, with a scheduled maturity date of February 28, 2021. As of January 31, 2021, principal of $85,000 was due on this note. On February 26, 2021, the maturity date of this note was extended to June 30, 2021. LONG-TERM NOTES PAYABLE On September 16, 2020, the Company issued a two-year unsecured convertible promissory note payable in the amount of $100,000, with interest at 5% per annum and maturing on September 15, 2022. The note was originally convertible into shares of common stock of the Company at $0.80 per share, which was above the closing market price of the Company’s common stock of $0.26 per share on September 16, 2020. This note was amended on December 15, 2020 to make it convertible into shares of common stock of the Company at $0.40 per share, which was below the closing market price of the Company’s common stock of $0.59 per share on December 15, 2020. As a result of the December 15, 2020 amendment to this convertible promissory note payable, the Company recognized a beneficial conversion feature on such date to recognize the difference between the closing market price of the common stock and the amended conversion price, which resulted in the Company recording a discount on debt aggregating $48,010. This debt discount is being presented as a reduction to the carrying amount of the related convertible promissory note payable in the consolidated balance sheet and is being amortized to operations as interest expense from December 15, 2020 through September 16, 2022, the maturity date of the note. For the three months and six months ended January 31, 2021, debt discount charged to operations as interest expense was $3,430, which resulted in unamortized debt discount of $44,580 at January 31, 2021. If the closing price of the Company’s common stock reaches $0.60 per share or greater (decreased from $1.20 per share as part of the December 15, 2020 amendment to the note), the outstanding principal and all accrued interest on this note shall automatically convert into common stock at the specified conversion rate. As of January 31, 2021, accrued interest payable related to the unsecured convertible promissory note payable was $1,877. On October 26, 2020, Rivulet Films, Inc., a wholly-owned subsidiary of the Company (“Rivulet Films”), issued a multiple advance promissory note (the “Note”) to Lawrence Silver, an approximate 11% shareholder of the Company, in the amount of up to $1,000,000, with interest at 10% per annum. The Note matures on October 6, 2022, with the principal balance outstanding, plus accrued but unpaid interest, being due and payable on the maturity date. The Note is secured by a first lien security interest on all of the assets of Rivulet Films (including its equity interest in PBP Productions LLC), personal guarantees of the Company’s officers, Michael Witherill and Aaron Klusman, and a corporate guarantee of the Company. Rivulet Films is required to use borrowings under the Note primarily to pay production costs associated with the movie production currently entitled “Please Baby Please”. Borrowings under this Note may be repaid at any time and reborrowed until the maturity date. Rivulet Films is required to apply any other funds received by it for the purpose of film financing and then any excess proceeds to pay any principal and interest owing under this Note. As of January 31, 2021, principal borrowings outstanding under the Note were $1,000,000, and related accrued interest was $27,444, which has been capitalized as project development cost (see Note 7).

PROMISSORY NOTES PAYABLE

6 Months Ended

Jan. 31, 2021

8. PROMISSORY NOTES PAYABLE

SHORT-TERM NOTES PAYABLE

On June 9, 2020, the Company issued a short-term unsecured convertible promissory note in the amount of $25,000, with interest at 12% interest per annum and maturing on September 7, 2020. The unsecured convertible promissory note was convertible into shares of common stock of the Company at $0.20 per share, which was in excess of the closing market price of the Company’s common stock on June 9, 2020 of $0.07 per share. On August 31, 2020, the principal balance of the unsecured convertible promissory note of $25,000, plus accrued interest payable of $682, was repaid through conversion into 128,410 shares of common stock.

On October 29, 2020, the Company issued a short-term unsecured promissory note to Daniel Crosser, who is an approximate 13% shareholder of the Company, in the amount of $100,000, with interest at 10% per annum. The note matures on April 29, 2021, with the principal balance outstanding, plus accrued but unpaid interest, being due and payable on the maturity date. As of January 31, 2021, accrued interest related to the unsecured promissory note was $2,611.

On November 10, 2020, the Company issued a short-term unsecured promissory note to Daniel Crosser, who is an approximate 13% shareholder of the Company, in the amount of $200,000, with interest at 5% per annum. The note was scheduled to mature on February 8, 2021, with the principal balance outstanding, plus accrued but unpaid interest, being due and payable on the maturity date. As of January 31, 2021, accrued interest related to the unsecured promissory note was $2,236. On February 8, 2021, the maturity date of this note was extended to June 30, 2021.

On December 10, 2020, the Company issued a short-term unsecured promissory note to Daniel Crosser, who is an approximate 13% shareholder of the Company, in the amount of $160,000, with interest at 5% per annum. The proceeds under this promissory note were received by the Company in November 2020. The note was scheduled to mature on March 10, 2021, with the principal balance outstanding, plus accrued but unpaid interest, being due and payable on the maturity date. As of January 31, 2021, accrued interest related to the unsecured promissory note was $1,518. On February 26, 2021, the maturity date of this note was extended to June 30, 2021.

On December 21, 2020, the Company issued a short-term promissory note to Daniel Crosser, who is an approximate 13% shareholder of the Company, in the amount of $40,000, without interest, with a scheduled maturity date of January 31, 2021. On January 31, 2021, the maturity date of this note was extended to June 30, 2021.

On December 23, 2020, the Company issued a short-term promissory note to John Morgan, an officer of the Company, in the amount of $20,000, without interest. The note was repaid on January 7, 2020.

Between December 15, 2020 and December 26, 2020, the Company’s subsidiary Mistress Movie LLC issued six short-term promissory notes to Cross Entertainment, LLC, a related party, aggregating $170,000, without interest, with a scheduled maturity date of February 28, 2021. As of January 31, 2021, $60,000 had been repaid and the remaining principal amount of $110,000 was due on these notes. On February 26, 2021, the maturity date of the $110,000 principal amount of the notes were extended to June 30, 2021.

On December 26, 2020, the Company issued a short-term promissory note to Cross Entertainment, LLC, a related party, in the amount of $110,000, without interest, with a scheduled maturity date of June 30, 2021. The Company received proceeds of $10,000 on this note through January 31, 2021. On January 31, 2021, the balance of the January 7, 2021 note of $85,000 was transferred to this note. As of January 31, 2021, a principal amount of $95,000 was due on this note.

On January 5, 2020, the Company issued a short-term promissory note to Lawrence M. Silver, who is an approximate 9% shareholder of the Company, in the amount of $70,000, without interest, with a scheduled maturity date of January 31, 2021. On January 31, 2021, the maturity date of this note was extended to June 30, 2021.

On January 7, 2021, the Company issued a short-term promissory note to Cross Entertainment, LLC, a related party, in the amount of $145,000, without interest, with a scheduled maturity date of January 31, 2021. Proceeds on this note were $145,000, of which $60,000 was repaid and the balance of $85,000 was transferred to the December 26, 2020 note as described above. As of January 31, 2021, there was no amounts due and payable on this note.

On January 29, 2021, the Company issued a short-term promissory note to Cross Entertainment, LLC, a related party, in the amount of $85,000, without interest, with a scheduled maturity date of February 28, 2021. As of January 31, 2021, principal of $85,000 was due on this note. On February 26, 2021, the maturity date of this note was extended to June 30, 2021.

LONG-TERM NOTES PAYABLE

On September 16, 2020, the Company issued a two-year unsecured convertible promissory note payable in the amount of $100,000, with interest at 5% per annum and maturing on September 15, 2022. The note was originally convertible into shares of common stock of the Company at $0.80 per share, which was above the closing market price of the Company’s common stock of $0.26 per share on September 16, 2020.

This note was amended on December 15, 2020 to make it convertible into shares of common stock of the Company at $0.40 per share, which was below the closing market price of the Company’s common stock of $0.59 per share on December 15, 2020.

As a result of the December 15, 2020 amendment to this convertible promissory note payable, the Company recognized a beneficial conversion feature on such date to recognize the difference between the closing market price of the common stock and the amended conversion price, which resulted in the Company recording a discount on debt aggregating $48,010. This debt discount is being presented as a reduction to the carrying amount of the related convertible promissory note payable in the consolidated balance sheet and is being amortized to operations as interest expense from December 15, 2020 through September 16, 2022, the maturity date of the note. For the three months and six months ended January 31, 2021, debt discount charged to operations as interest expense was $3,430, which resulted in unamortized debt discount of $44,580 at January 31, 2021.

If the closing price of the Company’s common stock reaches $0.60 per share or greater (decreased from $1.20 per share as part of the December 15, 2020 amendment to the note), the outstanding principal and all accrued interest on this note shall automatically convert into common stock at the specified conversion rate. As of January 31, 2021, accrued interest payable related to the unsecured convertible promissory note payable was $1,877.

On October 26, 2020, Rivulet Films, Inc., a wholly-owned subsidiary of the Company (“Rivulet Films”), issued a multiple advance promissory note (the “Note”) to Lawrence Silver, an approximate 11% shareholder of the Company, in the amount of up to $1,000,000, with interest at 10% per annum. The Note matures on October 6, 2022, with the principal balance outstanding, plus accrued but unpaid interest, being due and payable on the maturity date. The Note is secured by a first lien security interest on all of the assets of Rivulet Films (including its equity interest in PBP Productions LLC), personal guarantees of the Company’s officers, Michael Witherill and Aaron Klusman, and a corporate guarantee of the Company. Rivulet Films is required to use borrowings under the Note primarily to pay production costs associated with the movie production currently entitled “Please Baby Please”. Borrowings under this Note may be repaid at any time and reborrowed until the maturity date. Rivulet Films is required to apply any other funds received by it for the purpose of film financing and then any excess proceeds to pay any principal and interest owing under this Note. As of January 31, 2021, principal borrowings outstanding under the Note were $1,000,000, and related accrued interest was $27,444, which has been capitalized as project development cost (see Note 7).