Note 6 - Promissory and Convertible Notes Payable

9 Months Ended

Nov. 30, 2021

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE 6 – PROMISSORY and CONVERTIBLE NOTES PAYABLE

The Company’s outstanding notes payable are summarized as follows:

	November 30, 2021		February 28 2021
0% unsecured note payable - December 2013, due on demand	$	2,000	$	2,000
0% unsecured note payable - November 2015, due on demand		980		980
8% unsecured note payable - October 2018, due on demand		5,000		5,000
6% unsecured note payable – April 2019, due on demand		3,325		3,325
8% unsecured notes payable - October 2019, due on demand		65,000		65,000
Total Notes Payable	$	76,305	$	76,305

Interest expense for the three months ended November 30, 2021, and 2020 was $1,453 and $5,164 respectively. Interest expense for the nine months ended November 30, 2021, and 2020 was $4,363 and $15,497, respectively.

Convertible note payable consists of one note payable in the amount of $-0- and $67,500 at November 30, 2021 and February 28, 2021, respectively. The note which was issued in April 2019 for $45,000 accrued interest at an annual rate of 12% and matured in April 2020. In the event of default, the note principal is increased by 150% times the outstanding principal and provides for default interest at 22%. The conversion option expired on October 7, 2020.

On June 18, 2019, the Company received a default notice from Power Up stating that the Company was in default under the Power Up Note because, among other reasons, the Company failed to comply with the reporting requirements of the Securities Exchange Act of 1934 as required by the Note, and therefore accelerating the terms of the Power Up Note and demanding that the Company pay the default sum of $67,500 together with accrued interest and accrued default interest with respect to the Power Up Note. The Company reached a settlement of this matter with Power Up as of April 2021 in the amount of $70,200. Included in gain on debt conversion of $140,395 for the nine months ended November 30, 2021, is $23,996 of accrued interest that was not paid and $116,399 of derivative liability.

QUANTUM ENERGY, INC.

CONDENSED CONSOLIDATED NOTES TO FINANCIAL STATEMENTS - UNAUDITED

NOVEMBER 30, 2021