CONVERTIBLE LOANS - RELATED PARTY |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Loans Related Party [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONVERTIBLE LOANS - RELATED PARTY | 6. CONVERTIBLE LOANS – RELATED PARTY
At September 30, 2018 and June 30, 2018, convertible loan – related party consisted of the following:
During the three months ended September 30, 2018 and 2017, the Company recognized amortization of discount, included in interest expense, of $0 and $0, respectively.
Promissory Notes - Issued in fiscal year 2018
During the year ended June 30, 2018, the Company issued a total of $8,333 note with the following terms:
The Company received cash of $8,333.
The Company determined that the conversion feature met the definition of a liability in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and therefore bifurcated the embedded conversion option once the note becomes convertible and accounted for it as a derivative liability. The fair value of the conversion feature was recorded as a debt discount and amortized to interest expense over the term of the note.
The Company valued the conversion feature using the Black Scholes valuation model. The fair value of the derivative liability for all the notes that became convertible, including the notes issued in prior years, during the year ended June 30, 2018 amounted to $9,371. $8,333 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $1,038 was recognized as a “day 1” derivative loss. |