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Convertible Notes

3 Months Ended

Sep. 30, 2017

5. Convertible Notes

As of September 30, 2017 and June 30, 2017, the balance owing on convertible notes with term as describe below was $1,376,448 and $1,502,023, respectively.

Convertible note 1: On August 24, 2012, 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 10% and is convertible to common shares at a 25% discount of the average of 30 days prior to the conversion date.

Convertible note 2: On September 18, 2012, 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 10% and is convertible to common shares at a 25% discount of the average of 30 days prior to the conversion date.

Convertible note 3: On December 21, 2012, the Company entered into a convertible promissory note with an accredited investor for $100,000. The note has a term of six (6) months with an interest rate of 10% and is convertible to common shares at a 25% discount of the average of 30 days prior to the conversion date. .

Convertible note 4: 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.

Convertible note 5: 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. This convertible promissory note has been fully converted in the quarter ended September 30, 2017.

Convertible note 6: 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.

Convertible note 9: 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.

Convertible note 7: 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. This convertible promissory note has been fully converted in the quarter ended September 30, 2017.

Convertible note 8: 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. This convertible promissory note has been fully converted in the quarter ended September 30, 2017.

Convertible note 11: 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.

Convertible note 15: 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. This convertible promissory note has been fully converted in the quarter ended September 30, 2017.

Convertible note 16: 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. This convertible promissory note has been fully converted in the quarter ended September 30, 2017.

Convertible note 10: 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.

Convertible note 12: 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.

Convertible note 13: 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.

Convertible note 14: 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.

Convertible note 17: 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.

Convertible note 18 & 19: 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 fundings. 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 warrants were $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.

On July 17, 2017, the Company entered into a convertible promissory note with an accredited investor for $164,900. The note has a term of one year with an interest rate of 8% and is convertible to common shares at a fixed conversion price of $0.025.

On August 3, 2017, the Company entered into a convertible promissory note with an accredited investor for $150,000. The note has a term of six (6) months with an interest rate of 10% and is convertible to common shares at a 45% discount to average of 3 lowest trading price during last 20 trading days.

On August 22, 2017, the Company entered into a convertible promissory note with an accredited investor for $35,000. 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 of average two lowest price of last 20 trading days prices.

On September 15, 2017, the Company entered into a convertible promissory note with an accredited investor for $150,000. The note has a term of six (6) months with an interest rate of 10% and is convertible to common shares at a 45% discount to average of 3 lowest trading price during last 20 trading days.

On September 26, 2017, the Company entered into a convertible promissory note with an accredited investor for $15,000. 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 of average two lowest price of last 20 trading days prices.

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

		Balance							Conversion				Balance
Principal		as of			Default				in		# of		as of			Due		Interest			Conversion
Amount		6.30.17			Penalty		Repayment		principal		shares		9.30.17			Date		Rate			Price
	25,000		25,000			—		—		—		—		25,000			7/1/2016		10	%	75% of the average of 30 days prior to the conversion date.
	25,000		25,000			—		—		—		—		25,000			7/1/2016		10	%	75% of the average of 30 days prior to the conversion date.
	100,000		100,000			—		—		—		—		100,000			7/1/2016		10	%	75% of the average of 30 days prior to the conversion date.
	20,000		20,000			—		—		20,000		1,160,391		—			7/17/2017		8	%	40% discount of average of last 20 trading days prices
	20,000		25,000			—		—		25,000		1,426,674		—			7/17/2017		8	%	40% discount of average two lowest price of last 20 trading days prices
	20,000		20,000			—		—		—		—		20,000			7/17/2017		8	%	Greater of 40% discount to average of 3 lowest trading price during last 20 trading days or $.05
	43,000		43,000			—		—		43,000		2,462,180		—			1/24/2018		8	%	45% discount to average of 2 lowest trading price during last 20 trading days
	50,000		50,000			—		—		—		—		50,000			8/8/2017		8	%	40% discount of average two lowest price of last 20 trading days prices
	80,000		80,000			—		—		—		—		80,000			7/20/2017		8	%	40% discount of average two lowest price of last 20 trading days prices
	66,023		66,023			—		—		—		—		66,023			8/24/2017		8	%	40% discount of average two lowest price of last 20 trading days prices
	50,000		50,000			—		—		50,000		2,390,805		—			8/9/2017		8	%	40% discount of average two lowest price of last 20 trading days prices
	75,000		75,000			—		—		—		—		75,000			7/31/2017		8	%	40% discount of average two lowest price of last 20 trading days prices
	100,000		100,000			—		—		—		—		100,000			12/1/2017		10	%	Greater of 40% discount to average of 3 lowest trading price during last 20 trading days or $.05
	70,000		70,000			—		—		—		—		70,000			9/23/2017		8	%	40% discount of average two lowest price of last 20 trading days prices
	63,000		63,000			—		—		63,000		3,081,746		—			11/20/2017		8	%	42% discount on average of lowest 3 trading price 10 days prior to conversion date
	30,000		30,000			—		—		30,000		1,500,010		—			8/16/2017		8	%	Greater of 40% discount to average of 3 lowest trading price during last 20 trading days or $.05
	200,000		200,000			—		—		—		—		200,000			9/30/2017		8	%	40% discount of average two lowest price of last 20 trading days prices
	340,000		340,000			—		—		—		—		340,000			5/12/2018		10	%	45% discount of lowest price of last 20 trading days prices
	165,000		165,000			—		—		92,500		5,210,886		72,500			6/12/2018		10	%	45% discount of lowest price of last 20 trading days prices
	150,000		—			—		—		—		—		150,000			5/3/2018		10	%	45% discount to average of 3 lowest trading price during last 20 trading days
	150,000		—			—		—		—		—		150,000			6/15/2018		10	%	42% discount to average of 3 lowest trading price during last 20 trading days
	164,900		—			—		—		—		—		164,900			7/17/2018		8	%	The conversion price shall be $0.025 per share
	35,000		—			—		—		—		—		35,000			8/22/2018		8	%	40% discount of average two lowest price of last 20 trading days prices
	15,000		—			—		—		—		—		15,000			9/26/2018		8	%	40% discount of average two lowest price of last 20 trading days prices
	2,056,923		1,547,023											1,738,423

	Debt Discount		(45,000	)										(410,866	)

	Convertible debt balance, net of debt discount		1,502,023											1,327,557

In connection with the convertible debt, debt discount balance as of September 30, 2017 and June 30, 2017 were $410,866 and $45,000 respectively and were being amortized and recorded as interest expenses over the term of the convertible debt.

Please note that there is $91,906 and $0 debt discount amortized for the 3 months ended September 2017 and 2016 respectively.