XML 24 R13.htm IDEA: XBRL DOCUMENT

Convertible Notes

3 Months Ended

Sep. 30, 2018

8.	*Convertible Notes*

As of September 30, 2018 and June 30, 2018, the balance owing on convertible notes, net of debt discount, with terms as described below was $1,594,380 and $2,399,941, respectively.

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

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. As of September 30, 2018, the note is in default.

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. As of September 30, 2018, the note is in default.

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. As of September 30, 2018, the note is in default.

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. As of September 30, 2018, the note is in default.

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. As of September 30, 2018, the note is in default.

Convertible note 6: 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. As of September 30, 2018, the note is in default.

Convertible note 7: 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. As of September 30, 2018, the note is in default.

Convertible note 8: 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. As of September 30, 2018, the note is in default.

Convertible note 9: 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. As of September 30, 2018, the note is in default.

Convertible note 10: 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. As of June 30, 2018, the note is in default.

Convertible note 11: On March 1, 2017, the Company entered into a convertible promissory note with an accredited investor for $100,000. The note has been purchased by other investor in total amount of $156,067 with 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. As of September 30, 2018, there were $92,500 has been converted into the Company’s common stock and the Company incurred two conversion default penalties in total of $60,751. As of June 30, 2018, the remaining principal balance was $124,318. As of September 30, 2018, the Company converted $63,567 and the remaining balance of note was $60,751.

Convertible note 12: 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. As of September 30, 2018, the note is in default.

Convertible note 13: 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. As of September 30, 2018, the note is in default.

Convertible note 14: 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. As of September 30, 2018, the note is in default.

Convertible note 15 & 16: 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 had outstanding balance of $921,004 as of the year ended June 30, 2018. The fair value of the warrants were $40,400 as of June 30, 2018. During the three months ended September 30, 2018, the Company converted $425,000 into the Company’s common stock, the remaining balance of the note was $496,004 as of September 30, 2018 and the fair value of the warrant liability was $17,675. As of September 30, 2018, the note is in default and bears a default interest rate of 22% per annum.

Convertible notes issued during the year ended June 30, 2018 were as follows:

Convertible note 17: 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. As of September 30, 2018, the note is in default.

Convertible note 18: 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. As of September 30, 2018, the note has been fully converted.

Convertible note 19: 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. As of September 30, 2018, the note has been fully converted.

Convertible note 20: 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. As of September 30, 2018, the note has been fully converted.

Convertible note 21: 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, 2018, the note has been fully converted.

Convertible note 22: On December 7, 2017, the Company entered into a convertible promissory note with an accredited investor for $50,000. 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 $0.05.

Convertible notes issued during the period ended September 30, 2018 were as follows:

Convertible note 23: On September 20, 2018, the Company entered a convertible promissory note with an investor for a total amount of $267,500 (includes $5,000 legal fee and an OID of $12,500). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 55% of the lowest closing bid for the 20 consecutive trading days prior to the conversion date.

As of the period ended September 30, 2018, the Company’s convertible notes consisted of following:

Balance						Conversion				Balance
as of		Default		Addition/		in		# of		as of			Interest			Conversion
06.30.2018		Penalty		(Repayment)		principal		shares		09.30.2018		Due Date	Rate			Price
	25,000		—		—		—		—		25,000	2/24/2013		14	%	75% of the average of 30 days prior to the conversion date.
	25,000		—		—		—		—		25,000	3/18/2013		14	%	75% of the average of 30 days prior to the conversion date.
	100,000		—		—		—		—		100,000	6/21/2013		14	%	75% of the average of 30 days prior to the conversion date.
	20,000		—		—		—		—		20,000	7/17/2017		10	%	40% discount of average price of last 20 trading days prices
	25,000		—		—		—		—		25,000	7/17/2017		8	%	40% discount of average two lowest price of last 20 trading days prices
	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	7/20/2017		8	%	40% discount of average two lowest price of last 20 trading days prices
	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	8/9/2017		8	%	40% discount of average two lowest price of last 20 trading days prices
	75,000		—		—		—		—		75,000	7/31/2017		8	%	40% discount of average two lowest price of last 20 trading days prices
	124,318		—		—		63,567		3,919,404		60,751	12/1/2017		10	%	45% discount of lowest price of last 20 trading days prices
	70,000		—		—		—		—		70,000	9/23/2017		8	%	40% discount of average two lowest price of last 20 trading days prices
	30,000		—		—		—		—		30,000	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	9/30/2017		8	%	40% discount of average two lowest price of last 20 trading days prices
	921,004		—		—		425,000		14,907,323		496,004	5/12/2018		22	%	45% discount of lowest price of last 20 trading days prices
	150,000		—		—		150,000		3,745,330		—	5/3/2018		10	%	45% discount to average of 3 lowest trading price during last 20 trading days
	150,000		—		—		150,000		3,744,005		—	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		691,184		—	8/22/2018		8	%	40% discount of average two lowest price of last 20 trading days prices
	15,000		—		—		15,000		294,114		—	9/26/2018		8	%	40% discount of average two lowest price of last 20 trading days prices
	50,000		—		—		—		—		50,000	12/7/2018		8	%	The conversion price shall be $0.05 per share
	—		—		267,500		—		—		267,500	9/15/2019		8	%	55% discount of lowest price of last 20 trading days prices
	2,426,245				267,500		838,567		27,301,360		1,855,178

In connection with the convertible debt, debt discount balance as of September 30, 2018 and June 30, 2018 were $260,798 and $26,303 respectively and were being amortized and recorded as interest expenses over the term of the convertible debt.

As of the period ended September 30, 2018, the Company’s debt discount consisted of following:

Note Date	Due Date	OID		Amortization in FY 2018		Debt Discount Balance 6/30/2018		Amortization in 9/30/2018		Debt Discount Balance 9/30/2018
8/22/2017	8/22/2018	$	35,000	$	29,918	$	5,082	$	5,082	$	—
9/26/2017	9/26/2018		15,000		11,384		3,616		3,616		—
7/17/2017	7/17/2018		164,900		160,445		4,455		4,455		—
12/7/2017	12/7/2018		50,000		36,849		13,151		7,562		5,589
9/20/2018	9/15/2019		12,500		—		—		347		12,153
9/20/2018	9/15/2019		250,000		—		—		6,944		243,056
Total:		$	527,400	$	41,302	$	26,303	$	28,006	$	260,798