Convertible Notes

12 Months Ended

Jun. 30, 2017

Convertible Notes

Convertible Notes

7. Convertible Notes

As of June 30, 2017 and 2016, the balance owing on convertible notes with term as describe below was $1,502,023 and $394,167, respectively.

Convertible notes issued during the year ended June 30, 2017 were as follows:

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.  $43,297 of the note along with accrued interest of $4,365 was settled through issuance of 1,550,000 shares on May 22, 2017, $41,452.71 of the note was repaid by cash on May 25, 2017.  

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.   This note along with accrued interest of $30,768 was settled through issuance of 3,300,507 shares on May 23, 2017.

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.  $80,478 of this note (including interest of $3,157) was settled in June 2017 through the issuance of 2,561,276 shares. 

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 six (6) 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.   This note along with accrued interest of $19,286 was repaid by cash through a direct repayment from the proceeds from a new lender of a new note entered in June 2017.

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.   This note along with accrued interest of $21,251 was repaid by cash through a direct repayment from the proceeds from a new lender of a new note entered in June 2017.

On January 17, 2017, the Company entered into a convertible promissory note with an accredited investor for $25,000. The note has a term of six (6) months with an interest rate of 8% and is convertible to common shares at a 40% discount to the then current market price of our shares.  

On January 17, 2017, the Company entered into a convertible promissory note with an accredited investor for $20,000. The note has a term of six (6) months with an interest rate of 8% and is convertible to common shares at a 40% discount to the then current market price of our shares.

On January 20, 2017, the Company entered into a convertible promissory note with an accredited investor for $80,000. The note has a term of seven (6) months with an interest rate of 8% and is convertible to common shares at a 40% discount to the then current market price of our shares.

On January 24, 2017, the Company entered into a convertible promissory note with an accredited investor for $43,000. The note has a term of twelve (12) months with an interest of 8% and is convertible to common shares at a 45% discount to the then current market price of our shares.

On February 8, 2017, the Company entered into a convertible promissory note with an accredited investor for $50,000. The note has a term of six (6) months with an interest rate of 8% and is convertible to common shares at a 40% discount to the then current market price of our shares.

On February 9, 2017, the Company entered into a convertible promissory note with an accredited investor for $50,000. The note has a term of six (6) months with an interest rate of 8% and is convertible to common shares at a 40% discount to the then current market price of our shares.

On February 15, 2017, the Company entered into a convertible promissory note with an accredited investor for $63,000. The note has a term of nine (9) months with an interest rate of 8% and is convertible to common shares at 40% discount to the then current market price of our shares.

On February 16, 2017, the Company entered into a convertible promissory note with an accredited investor for $30,000. The note has a term of six (6) months with an interest rate of 8% and is convertible to common shares at a 40% discount to the then current market price of our shares.

On February 24, 2017, the Company entered into a convertible promissory note with an accredited investor for $66,023. The note has a term of six (6) months with an interest rate of 8% and is convertible to common shares at a 40% discount to the then current market price of our shares.

On February 28, 2017, the Company entered into a convertible promissory note with an accredited investor for $75,000. The note has a term of six (6) months with an interest rate of 8% and is convertible to common shares at a 40% discount.  

On March 1, 2017, the Company entered into a convertible promissory note with an accredited investor for $100,000. 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 to the then current market price of our shares.

On March 23, 2017, the Company entered into a convertible promissory note with an accredited investor for $70,000. The note has a term of six (6) months with an interest rate of 8% and is convertible to common shares at a 40% discount to the then current market price of our shares.

On March 31, 2017, the Company entered into a convertible promissory note with an accredited investor for $200,000. The note has a term of six (6) months with an interest rate of 8% and is convertible to common shares at a 40% discount to the then current market price of our shares.

On May 17, 2017, the Company entered a convertible promissory note with an investor for a total amount of $1,375,000 (after $10,000 legal and due diligence fee) with an OID of $125,000, the note will be fulfilled through a series of funding. The note is due 12 months after each funding date and bear an interest rate of 10%. The conversion price for the note is 55% of the lowest closing bid for the 20 consecutive trading days prior to the conversion date. In connection with the note, the investor will also receive warrants and is calculated based on 15% of the maturity amount. The warrants have a life of four years with exercise price of $0.15 per share and have cashless exercise option. The Company received $460,000 (net with OID of $45,000) from this note during the year ended June 30, 2017. The fair value of the warrant was $40,400 at grant date. As of June 30, 2017, the Company had outstanding convertible note payable to this investor for $460,000 (net with OID of $45,000), the fair value of the warrant liability was $25,250.

During the year ended June 30, 2017, the Company received net cash proceeds of $1,769,523 from issuance of convertible notes.

As of June 30, 2017, the Company’s convertible notes consisted of following:

		As of June 30, 2017
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		100,000		—		100,000
Convertible Note	6/19/2017		20,000		—		20,000
Convertible Note	7/17/2017		25,000		—		25,000
Convertible Note	7/17/2017		20,000		—		20,000
Convertible Note	1/24/2018		43,000		—		43,000
Convertible Note	8/8/2017		50,000		—		50,000
Convertible Note	7/20/2017		80,000		—		80,000
Convertible Note	8/24/2017		66,023		—		66,023
Convertible Note	8/9/2017		50,000		—		50,000
Convertible Note	8/31/2017		75,000		—		75,000
Convertible Note	12/1/2017		100,000		—		100,000
Convertible Note	9/23/2017		70,000		—		70,000
Convertible Note	11/20/2017		63,000		—		63,000
Convertible Note	8/16/2017		30,000		—		30,000
Convertible Note	9/30/2017		200,000		—		200,000
Convertible Note	5/11/2018		340,000		30,000		310,000
Convertible Note	6/11/2018		165,000		15,000		150,000
Total Convertible Promissory Notes		$	1,547,023		45,000	$	1,502,023

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