Convertible Notes

6 Months Ended

Dec. 31, 2016

Convertible Notes

Convertible Notes

5. Convertible Notes

As of December 31, 2016 and June 30, 2016 the balance owing on convertible notes with term as describe below was $250,000 and $394,167 respectively. The convertible promissory notes must be repaid by our Company within six months from the date of issuance; accrue interest at the rate of 14%; and are subject to conversion at the election of the investors at such time as our Company has raised a minimum of $500,000 in a subsequent equity financing. The conversion price will be the lower of 80% of the per share purchase price paid for by the new investors in the subsequent financing, or $0.50 per share. Unless these promissory notes are converted or repaid earlier, our Company must pay the note-holders the amount of the then accrued interest on the three, six, and nine month anniversaries of the issue date. As of December 31, 2016, three convertible promissory in the amount of $115,000 with accrued interest of $59,731, were converted to 3,833,358 restricted common shares as follows:

On November 3, 2016, the Company issued 982,620 common shares in exchange for the cancellation of $50,000 principal balance and accrued interest of $24,955 on convertible debt.

On December 31, 2016, the Company issued 1,761,957 common shares in exchange for the cancellation of $40,000 principal balance and accrued interest of $20,668 on convertible debt.

On December 31, 2016, the Company issued 1,088,781 common shares in exchange for the cancellation of $25,000 principal balance and accrued interest of $12,482 on convertible debt.

Convertible notes issued during the quarter ended December 31, 2016:

On October 18, 2016, the Company entered into a convertible promissory note with an accredited investor for $84,750. The note has a term of twelve (12) months with an interest rate of 10% and is convertible to common shares at a 50% discount. The Company received a net amount of $75,000, after fees.

On November 4, 2016, the Company entered into a convertible promissory note with an accredited investor for $84,750. The note has a term of nine (9) months with an interest rate of 10% and is convertible to common shares at a 50% discount. The Company received a net amount of $75,000, after fees.

On November 16, 2016, the Company entered into a convertible promissory note with an accredited investor for $110,000. The note has a term of nine (9) months with an interest rate of 10% and is convertible to common shares at a 45% discount. The Company received a net amount of $107,000, after fees.

On December 19, 2016, the Company entered into a convertible promissory note with an accredited investor for $20,000. The note has a term of seven (7) months with an interest rate of 8% and is convertible to common shares at a 40% discount.

On December 20, 2016, the Company entered into a convertible promissory note with an accredited investor for $38,000. The note has a term of nine (9) months with an interest rate of 10% and is convertible to common shares at a 45% discount. The Company received a net amount of $30,000, after fees.

On December 23, 2016, the Company entered into a convertible promissory note with an accredited investor for $55,000. The note has a term of nine (9) months with an interest rate of 8% and is convertible to common shares at a 42% discount. The Company received a net amount of $52,000, after fees.

As of December 31, 2016, the Company’s convertible notes consisted of following:

		As of December 31, 2016
Note Type and Investor	Due Date		Balance	Discount		Carrying Value
Convertible Note	7/1/2016		25,000	—		25,000
Convertible Note	7/1/2016		25,000	—		25,000
Convertible Note	7/1/2016		25,000	—		25,000
Convertible Note	7/1/2016		25,000	—		25,000
Convertible Note	7/1/2016		25,000	—		25,000
Convertible Note	7/1/2016		25,000	—		25,000
Convertible Note	7/1/2016		100,000	—		100,000
Convertible Note	10/18/2017		84,750	—		84,750
Convertible Note	8/4/2017		84,750	—		84,750
Convertible Note	8/16/2017		110,000	—		110,000
Convertible Note	9/20/2017		38,000	—		38,000
Convertible Note	7/17/2017		20,000	—		20,000
Convertible Note	9/30/2017		55,000	—		55,000
Total Convertible Promissory Notes		$	642,500		$	642,500

As of June 30, 2016, the Company’s convertible notes consisted of following:

		As of June 30, 2016
Note Type and Investor	Due Date		Balance	Discount		Carrying Value
Convertible Note	7/1/2016		25,000	—		25,000
Convertible Note	7/1/2016		40,000	—		40,000
Convertible Note	7/1/2016		50,000	—		50,000
Convertible Note	7/1/2016		25,000	—		25,000
Convertible Note	7/1/2016		25,000	—		25,000
Convertible Note	7/1/2016		25,000	—		25,000
Convertible Note	7/1/2016		25,000	—		25,000
Convertible Note	7/1/2016		25,000	—		25,000
Convertible Note	7/1/2016		25,000	—		25,000
Convertible Note	7/1/2016		100,000	—		100,000
Convertible Note	7/1/2016		20,834	—		20,834
Convertible Note	7/1/2016		8,333	—		8,333
Total Convertible Promissory Notes		$	394,167		$	394,167