| DEBT | NOTE 6 - DEBT Non-convertible
- debt On April 30, 2018, T3 Communications, Inc.,
a Nevada corporation ("T3") entered into a secured promissory note for $650,000 with an effective annual interest rate
of 0% and a maturity date of May 14, 2018, provided, however, the Maturity Date will automatically be extended by one (1) additional
period of thirty (30) days, until June 14, 2018. In addition, T3 entered into a Security Agreement, whereby T3 agreed to pledge
one third of the outstanding shares of its Florida operations, T3 Communications, Inc., the secured interest will continue until
the principal balance is paid in full. Furthermore, a late fee of $3,000 per calendar week will be accessed beginning on May 15,
2018 and will continue until he principal balance is paid in full. The lender agreed to extend the maturity date until January
31, 2020, we are currently paying a $3,000 per week late fee. As of October 31, 2019 and July 31, 2019, the outstanding principal
balance was $650,000. On April 30, 2018, T3 entered into a credit
facility under a secured promissory note of $500,000, interest payment for the first twenty-three months with a balloon payment
on the twenty-fourth month and a maturity date of April 30, 2020. Collateralized by T3's accounts receivables and with an effective
annual interest rate of prime plus 5.25%, adjusted quarterly on the first day of each calendar quarter. However, the rate will
never be less than 9.50% per annum. In the event of default, the interest rate will be the maximum non-usurious rate of interest
per annum permitted by whichever of applicable United States federal law or Louisiana law permits the higher interest rate. T3
agreed to pay the lender a commitment fee of 1.00% upon payment of the first interest payment under the credit facility and 1.00%
on the first anniversary of the credit facility. In addition, T3 agreed to pay a monitoring fee of 0.33% of the credit facility,
payable in arrears monthly. T3 also agreed to pay an over-advance fee of 3.00% of the amount advanced in excess of the borrowing
base or maximum amount of the credit facility, payable in arrears monthly. T3 is required to maintain the following financial covenants:
1) A consolidated debt service coverage ratio, as of the last day of each fiscal quarter, of at least 1.25 to 1.00, 2) A fixed
charge coverage ratio, as of the last day of each fiscal quarter, of at least 1.25 to 1.00, and 3) A tangible net worth, at all
times of at least $100,000. As of October 31, 2019 and July 31, 2019, the outstanding principal balance was $500,000. On October 22, 2018, the Company issued
a secured promissory note for $50,000, bearing interest at a rate of 8% per annum, with maturity date of December 31, 2018. The
promissory note is secured by a Pledge and Escrow Agreement, whereby the Company agreed to pledge rights to a collateral due under
certain Agreement. In June 2019, the maturity date was extended to July 31, 2019. As of the date of this filing, we are working
with the lender to extend the maturity date on the note. The outstanding balance as of October 31, 2019 was $50,000. On June 14, 2019, the Company, entered
into a Stock Purchase Agreement (the "Agreement") to acquire a 12% minority interest in Itellum Comunicacions Costa Rica,
S.R.L. In conjunction with this transaction, we entered into a non-recourse promissory note for $17,500 with an effective annual
interest rate of 8% and an initial maturity date of September 14, 2019. As of the date of this filing, we are working with the
lender to extend the maturity date on the note. The outstanding balance as of October 31, 2019 was $17,500. Notes payable, related party On April 30, 2018, T3 entered into a convertible
secured promissory note for $525,000 with an effective annual interest rate of 8% and a maturity date of April 30, 2020. With a
principal payment of $100,000 due on June 1, 2018 and a principal payment of $280,823 due on April 30, 2020. Payment are based
on a 60-month repayment schedule. At any time while this Note is outstanding, but only upon: (i) the occurrence of an Event of
Default under the Note or the Pledge and Escrow Agreement; or (ii) mutual agreement between the Borrower and the Holder, the Holder
may convert all or any portion of the outstanding principal, accrued and unpaid interest, Premium, if applicable, and any other
sums due and payable hereunder (such total amount, the "Conversion Amount") into shares of Common Stock (the "Conversion
Shares") at a price equal to: (i) the Conversion Amount (the numerator); divided by On May 1, 2018, T3 entered into a secured
promissory note for $275,000 with an effective annual interest rate of 0% with an interest and principal payment of $6,000 per
month and shall continue perpetuity until the entire principal amount is paid in full. The promissory note is guaranteed to the
lender by 15% of the stock owned by T3 in its Florida operations, T3 Communications, Inc., the secured interest will continue until
the principal balance is paid in full. In conjunction with the promissory note, the Company issued 3-year warrants to purchase
100,000 shares of common stock at an exercise price of $0.50 per share. Under a Black-Scholes valuation the relative fair market
value of the warrants at time of issuance was approximately $26,543 and was recognized as a discount on the promissory note, the
company amortized $1,731 as interest expense during the three months ended October 31, 2019. The total unamortized discount as
of October 31, 2019 and July 31, 2019 were $14,955 and $16,686, respectively. During the three months ended October 31, 2019, the
Company paid $13,823, of the principal balance. The total principal outstanding as of October 31, 2019 and July 31, 2019 were $195,909
and $209,732, respectively. The note holder also serves as Board Member of T3 Communications, Inc., the Florida entity that is
one of our operating subsidiaries. Convertible debt non-derivative In March 2018,
the Company entered into two (2) Promissory Notes (the "Notes") for $250,000 each, bearing interest at a rate of 12%
per annum. The Notes have a maturity date of September 15, 2018, provided, however, the Company shall have the right to request
that the maturity date to be extended by one (1) additional period of ninety (90) days, until December 14, 2018. The Notes are
payable every month, commencing April 15, 2018, in monthly payments of interest only and a single payment of the principal amount
outstanding plus accrued interes t on September 15, 2018. T " Variable Conversion
Price Shares " Fixed Conversion Price "Fixed Conversion Price" On June 19, 2018, the
Company entered into various Promissory Notes (the "Notes") for $272,000, bearing interest at a rate of 10% per annum,
with an initial maturity date of April 10, 2019. In conjunction with the Notes, the Company issued 255,000 warrants under the promissory
notes, the warrants vested at time of issuance. The warrants have a term of 3 years, with an exercise price of $0.10. Under a Black-Scholes
valuation the relative fair market value of the warrants at time of issuance was approximately $118,400 and was recognized as a
discount on the promissory notes. The Company amortized $109,552 and $8,848 as a non-cash interest during the years ended July
31, 2019 and 2018, respectively. The total unamortized discount as of July 31, 2019 and 2018 were $0 and $109,552, respectively.
On March 29, 2019, the Company entered into a First Amendment to the Promissory Notes, under the amendments the note holders agreed
to extend the maturity date until June 30, 2019. In addition, as part of the amendments, the Company agreed to issue 85,000 shares
of common stock. The shares were recorded as debt discount of $17,425 and amortized over the remaining term of the notes. The Company
amortized $17,425 as a non-cash interest during the years ended July 31, 2019. On June 30, 2019, the Company entered into a Second
Amendment to the Promissory Notes, under the amendments the note holders agreed to extend the maturity date until November 30,
2019. In addition, as part of the amendments, the Company agreed to issue 85,000 shares of common stock. The shares were recorded
as debt discount of $14,450 and amortized over the remaining term of the notes. The Company amortized $8,662 as a non-cash interest
during the three months ended October 31, 2019. The total unamortized discount as October 31, 2019 and July 31, 2019 for the issuance
of the second amendment shares were $2,898 and $11,560, respectively. As of the date of this filing, we are working with the lenders
to extend the maturity date on the notes. The total principal outstanding balance as of October 31, 2019 and July 31, 2019 was
$272,000. Convertible debt
- derivative On January 12, 2018, the Company entered
into a securities purchase agreement with Peak One Opportunity Fund, L.P., a Delaware limited partnership ("Peak One"). Under
the agreement, Peak One agreed to purchase from us up to $600,000 aggregate principal amount of our convertible debentures (together
the "Debentures" and each individual issuance a "Debenture"), bearing interest at a rate of 0% per annum, with maturity on the
third anniversary of the respective date of issuance. On July 25, 2018, the securities purchase agreement was amended to increase
to $620,000 the aggregate principal amount of the convertible debentures. Peak One - First Debenture The Company issued the
first debenture (the "Debenture") to Peak One on January 17, 2018 in the principal amount of $200,000 for a purchase
price of $180,000 and 0% percent stated interest rate. The Company paid Peak One $6,000 for legal and compliance fees. In addition,
the Company paid $14,400 in other closing costs, these fees were deducted from the proceeds at time of issuance. The Company recorded
these discounts and cost of $40,400 as a discount to the Debenture was amortized to interest expense. On July 17, 2018, the Company redeemed
$120,000 of the principal outstanding, at a redemption price of $156,000. The Company recognized the redemption price as interest
expense during the period. The Company analyzed the Debenture for
derivative accounting consideration and determined that the embedded conversion option qualified as a derivative instrument, due
to the variable conversion price. Therefore, the Company recognized derivative liability of $112,000 at July 31, 2018, of which
$80,000 was recorded as debt discount and was amortized during the term of the note, and $32,000 was recorded as derivative loss.
I n connection with the execution of the Debenture, we issued 250,000 shares of our common
stock to Peak One, the shares were recorded with a relative fair value of $0, the Company also recorded debt discount of $80,000
and amortized to interest expense. On August 2, 2018, the Company redeemed
$40,000 of the principal outstanding under the convertible debenture, dated January 12, 2018 with Peak One Opportunity Fund, L.
P., at a redemption price of $56,000. The Company recognized the difference between the redemption price and principal balance
paid as interest expense of $16,000. On November 26, 2018, the Company issued 139,860 shares of common stock for the conversion
of $20,000 of the principal outstanding under the convertible debenture. On December 20, 2018, the Company issued 356,007 shares
of common stock for the conversion of $20,000 of the principal outstanding under the convertible debenture. During the years ended July 31, 2019, the
Company amortized $80,000 of the debt discount as interest expense related to the convertible debenture. The total unamortized
discount as of October 31, 2019 and July 31, 2019 was $0. The total principal outstanding balance as of October 31, 2019 and July
31, 2019 was $0. Peak One - Second Debenture The Company issued a
second debenture (the "Debenture") to Peak One on July 31, 2018 in the principal amount of $220,000 for a purchase
price of $198,000 and 0% percent stated interest rate. The Company paid Peak One $5,000 for legal and compliance fees, these fees
were deducted from the proceeds at time of issuance. The Company recorded these discounts and cost of $22,000 as a discount to
the Debenture and amortized to interest expense. The Company analyzed the Debenture for
derivative accounting consideration and determined that the embedded conversion option qualified as a derivative instrument, due
to the variable conversion price. Therefore, the Company recognized derivative liability of $189,171. I n
connection with the execution of the Debenture, we issued 130,000 shares of our common stock to Peak One, the shares were recorded
with a relative fair value of $3,627 and The
following conversion were recognized by the Company: On February 12, 2019, the Company issued
475,511 shares of common stock for the conversion of $20,000 of the principal outstanding under the convertible debenture. On March 8, 2019, the Company issued 356,633
shares of common stock for the conversion of $25,000 of the principal outstanding under the convertible debenture. On April 9, 2019, the Company issued 356,633
shares of common stock for the conversion of $25,000 of the principal outstanding under the convertible debenture. On May 10, 2019, the Company issued 713,266
shares of common stock for the conversion of $50,000 of the principal outstanding under the convertible debenture. On June 19, 2019, the Company issued 713,266
shares of common stock for the conversion of $50,000 of the principal outstanding under the convertible debenture. On August 26, 2019, the Company issued
416,666 shares of common stock for the conversion of $25,000 of the principal outstanding under the convertible debenture. On October 31, 2019, the Company issued
831,669 shares of common stock for the conversion of $25,000 of the principal outstanding under the convertible debenture. During the three months ended October 31,
2019, the Company amortized $29,214 of the debt discount as interest expense. The total unamortized discount as October 31, 2019
and July 31, 2019, were $0 and $29,214. The total principal outstanding balance as of October 31, 2019 and July 31, 2019 were $0
and $50,000, respectively. The convertible debentures dated January
17, 2018 and July 31, 2018 with Peak One provide the option to the holder to convert at any time on or after the 180th calendar
day after the issue date, to convert all or any portion of the then outstanding and unpaid principal amount and interest under
the Promissory notes into shares of Common Stock of the Company at a conversion price for each share of Common Stock equal to the
lower of (i) $0.50 (the "Fixed Conversion Price") , or (ii) 70% of the lowest closing bid price of the Company's
Common Stock during the twenty (20) Trading Days immediately preceding the date of the date of conversion of the Debentures (provided,
further, that if either the Company is not DWAC Operational at the time of conversion or the Common Stock is traded on the OTC
Pink ("OTCP") at the time of conversion, then seventy percent (70%) shall automatically adjust to sixty-five percent
(65%) of the lowest closing bid price (as reported by Bloomberg LP) of the Common Stock for the twenty (20) Trading Days immediately
preceding the date of conversion of the Debentures), subject in each case to equitable adjustments resulting from any stock splits,
stock dividends, recapitalizations or similar events. (the "Alternate Conversion Price") The Debentures called for redemption shall
be redeemable by the Company, upon not more than two (2) days written notice, for an amount (the "Redemption Price")
equal to: (i) if the Redemption Date (as defined below) is ninety (90) days or less from the date of issuance of this Debenture,
One Hundred Ten percent (110%) of the sum of the Principal Amount so redeemed plus accrued interest, if any; (ii) if the Redemption
Date is greater than or equal to one ninety-one (91) days from the date of issuance of this Debenture and less than or equal to
one hundred twenty (120) days from the date of issuance of this Debenture, One Hundred Fifteen percent (115%) of the sum of the
Principal Amount so redeemed plus accrued interest, if any; (iii) if the Redemption Date is greater than or equal to one hundred
twenty one (121) days from the date of issuance of this Debenture and less than or equal to one hundred fifty (150) days from the
date of issuance of this Debenture, One Hundred Twenty percent (120%) of the sum of the Principal Amount so redeemed plus accrued
interest, if any; (iv) if the Redemption Date is greater than or equal to one hundred fifty one (151) days from the date of issuance
of this Debenture and less than or equal to one hundred eighty (180) days from the date of issuance of this Debenture, One Hundred
Thirty percent (130%) of the sum of the Principal Amount so redeemed plus accrued interest, if any; and (v) if the Redemption Date
is greater than or equal to one hundred eighty one (181) days from the date of issuance of this Debenture, One Hundred Forty percent
(140%) of the sum of the Principal Amount so redeemed plus accrued interest, if any. The date upon which the Debentures are redeemed
and paid shall be referred to as the "Redemption Date". In the Event of Default to the Holders
of all Debentures then outstanding, and in each and every such case, unless such Event of Default shall have been waived in writing
by a majority in interest of the Holders of the Debentures (which waiver shall not be deemed to be a waiver of any subsequent default),
then at the option of a majority in interest of the Holders and in the discretion of a majority in interest of the Holders, take
any or all of the following actions: (i) pursue remedies against the Company in accordance with any of the Holder's rights,
(ii) increase the interest rate applicable to the Debentures to the lesser of eighteen percent (18%) per annum and the maximum
interest rate allowable under applicable law, (iii) in the case of an Event of Default under Section 10(e)(ii)(1) based on the
Company's failure to be DWAC Operational, increase the Principal Amount to an amount equal to one hundred ten percent (110%)
of the then-outstanding Principal Amount, (iv) in the case of an Event of Default under Section 10(d)(i), increase the Principal
Amount to an amount equal to one hundred twenty percent (120%) of the then-outstanding Principal Amount and an additional ten percent
(10%) discount shall be factored into the Conversion Price until this Debenture is no longer outstanding, (v) in the case of an
Event of Default under Section 10(d)(i) through (v), increase the Principal Amount of the relevant Holder's Debenture by
One Thousand Dollars and 00/100 ($500.00) for each day the related failure continues, (vi) in the case of an Event of Default under
Section 10(d)(ii) through (v) arising from an untimely delivery to the Holder of Conversion Shares or shares of Common Stock in
de-legended form, if the closing bid price of the Common Stock on the Trading Day immediately prior to the actual date of delivery
of Conversion Shares or de-legended shares, as the case may be, is less than the closing bid price on the Trading Day immediately
prior to the date when Conversion Shares or de-legended shares were required to be delivered, increase the Principal Amount of
the relevant Holder's Debenture by an amount per share equal to such difference, and (vii) following the expiration of the
applicable grace period (if any), at the option and discretion of the Holder, accelerate the full indebtedness under this Debenture,
in an amount equal to one hundred forty percent (140%) of the outstanding Principal Amount and accrued and unpaid interest (the
"Acceleration Amount"), whereupon the Acceleration Amount shall be immediately due and payable, without presentment,
demand, protest or notice of any kinds, all of which are hereby expressly waived, anything contained herein, in the Securities
Purchase Agreement or in any other note or instruments to the contrary notwithstanding. In the case of an Event of Default under
Section 10(d)(ii), the Holder may either (i) declare the Acceleration Amount to exclude the Conversion Amount that is the subject
of the Event of Default, in which case the Acceleration Amount shall be based on the remaining Principal Amount and accrued interest
(if any), in which case the Company shall continue to be obligated to issue the Conversion Shares, or (ii) declare the Acceleration
Amount to include the Conversion Amount that is the subject of the Event of Default, in which case the Acceleration Amount shall
be based on the full Principal Amount, including the Conversion Amount, and accrued interest (if any), whereupon the Notice of
Conversion shall be deemed withdrawn. Convertible Promissory
Notes with four (4) investors - January 2019 On January 16, 2019, the Company entered
into various Securities Purchase Agreements (the SPAs") with four (4) different investors (each an "Investor",
and together the "Investors") pursuant to which each Investor purchased a 10% unsecured convertible promissory note
(each a "Note", and together the "Notes") from the Company. Three of the notes are in the aggregate principal
amount of $140,000 each and a maturity date of October 16, 2019. One of the notes is in the aggregate principal amount of $57,750
and a maturity date of January 24, 2020. The purchase price of $140,000 of each of three Notes were paid in cash on January 16,
2019. After payment of transaction-related expenses of $51,000, net proceeds to the Company from the three Notes totaled $369,000.
The purchase price of $57,750 Note was paid in cash on January 24, 2019. After payment of transaction-related expenses of $7,750,
net proceeds to the Company from Note totaled $50,000. The Company recorded these discounts and cost of $58,750 as a discount to
the Notes and fully amortized as interest expense during the period. I n connection with the
execution of the Notes, we issued 500,000 shares of our common stock to the Note holders, the shares were recorded with a
relative fair value of $0 as the notes were fully discounted by derivative liability. The Company analyzed the Notes for derivative
accounting consideration and determined that the embedded conversion option qualified as a derivative instrument, due to the variable
conversion price. As a result, at the time of issuance, the Company recognized derivative liability for the four (4) new convertible
notes of $655,345, of which $419,000 was recorded as debt discount and will be amortized during the term of the Notes, and $236,345
was recorded as day 1 derivative loss. On July 12, 2019, the
Company redeemed the full outstanding principal balance on two of the convertible notes for $280,000, at a redemption price of
$382,726. The Company recognized the difference between the redemption price and principal balance paid as interest expense of
$102,726. On July 12, 2019, the
Company redeemed $70,000 of the principal outstanding on one of the convertible notes, at a redemption price of $91,000. The Company
recognized the difference between the redemption price and principal balance paid as interest expense of $21,000. On July 19, 2019, the
Company issued 156,202 shares of common stock for the conversion of $9,500 of the principal outstanding and $500 in fees under
one of the convertible notes. On July 25, 2019, the
Company issued 312,500 shares of common stock. The shares were issued in conjunction with a conversion of $20,000 of the principal
outstanding under a convertible debenture. On August 6, 2019, the Company entered
into an Assignment Agreement whereby Jefferson Street Capital LLC (the "Assignor") assigned a principal amount of $25,000,
representing a portion of a Convertible Promissory Note dated January 24, 2019 to Armada Investment Fund LLC (the "Assignee").
The note is in the aggregate principal amount of $25,000 and a maturity date of January 24, 2020. On August 26, 2019, the
Company issued 250,000 shares of common stock for the conversion of $14,500 of the principal outstanding and $500 in fees under
one of the convertible notes. On August 27, 2019, the
Company issued 277,291 shares of common stock for the conversion of $12,750 of the principal outstanding and $3,888 in fees under
one of the convertible notes. On September 23, 2019,
the Company issued 342,466 shares of common stock for the conversion of $14,500 of the principal outstanding and $500 in fees under
one of the convertible notes. On October 29, 2019,
the Company issued 465,736 shares of common stock for the conversion of $13,500 of the principal outstanding and $500 in fees under
one of the convertible notes. The total unamortized discount on the Notes
as of October 31, 2019 and July 31, 2019 were $0 and $29,765, respectively. The total principal balance outstanding as of October
31, 2019 and July 31, 2019, were $18,000 and $98,250. The Company amortized $29,765 of debt discount as interest expense during
the three months ended October 31, 2019. Each Investor is entitled
to, at its option, convert all or any amount of the principal amount and any accrued but unpaid interest of the Note into shares
of the Company's Common Stock, at any time, at a conversion price for each share of Common Stock equal to (i) the lowest
trading price of the Common Stock (as defined in the Note) as reported on the National Quotations Bureau OTC Marketplace exchange
upon which the Company's shares are traded during the twenty (20) consecutive Trading Day period immediately preceding the
issuance date of each Note; or (ii) 60% multiplied by the lowest traded price of the Common Stock during the twenty (20) consecutive
Trading Day period immediately preceding the Trading Day that the Company receives a notice of conversion (the "Variable
Conversion Price"). The Variable Conversion Price may further be adjusted in connection with the terms of the Notes. The Company shall at all times reserve
a minimum of six (6) times the number of its authorized and unissued common stock (the "Reserved Amounts"), free from
preemptive rights, to provide for the issuance of Common Stock upon the full conversion of the Notes. Upon full conversion of each
Note, any shares remaining in such reserve shall be cancelled. The Company will, from time to time, increases the Reserved Amount
in accordance with the Company's obligations under the Notes. Pursuant to the terms of the SPAs, for
so long as any of the Investors owns any shares of Common Stock issued upon conversion of a Note (the "Conversion Shares"),
the Company covenants to secure and maintain the listing of such shares of Common Stock. The Company is also subject to certain
customary negative covenants under the Notes and the SPAs, including but not limited to the requirement to maintain its corporate
existence and assets, subject to certain exceptions, and not to make any offers or sales of any security under circumstances that
would require registration of or stockholder approval for the Notes or the Conversion Shares. Convertible Promissory Note - February
2019 On February 22, 2019, the Company entered
into a Securities Purchase Agreement (the SPA") with an investor (an "Investor") the Investor purchased a 10% unsecured
convertible promissory note (the "Note") from the Company. The note is in the aggregate principal amount of $57,750
and a maturity date of February 22, 2020. After payment of transaction-related expenses of $7,750, net proceeds to the Company
from the Note totaled $50,000. The Company recorded these discounts and cost of $7,750 as a discount to the Note and fully amortized
as interest expense during the period. The Company analyzed the Note for derivative
accounting consideration and determined that the embedded conversion option qualified as a derivative instrument, due to the variable
conversion price. As a result, at the time of issuance, the Company recognized derivative liability for the convertible note of
$79,729, of which $50,000 was recorded as debt discount and will be amortized during the term of the Note, and $29,729 was recorded
as day 1 derivative loss. On October 27, 2019,
the Company issued 332,667 shares of common stock for the conversion of $9,500 of the principal outstanding and $500 in fees under
one of the convertible notes. The total unamortized discount on the Notes
as of October 31, 2019 and July 31, 2019 were $13,924 and $29,166, respectively. The total principal balance outstanding as of
October 31, 2019 and July 31, 2019, were $48,250 and $57,750. The Company amortized $15,242 of debt discount as interest expense
during the three months ended October 31, 2019. The Investor is entitled
to, at its option, convert all or any amount of the principal amount and any accrued but unpaid interest of the Note into shares
of the Company's Common Stock, at any time, at a conversion price for each share of Common Stock equal to (i) the lowest
trading price of the Common Stock (as defined in the Note) as reported on the National Quotations Bureau OTC Marketplace exchange
upon which the Company's shares are traded during the twenty (20) consecutive Trading Day period immediately preceding the
issuance date of each Note; or (ii) 60% multiplied by the lowest traded price of the Common Stock during the twenty (20) consecutive
Trading Day period immediately preceding the Trading Day that the Company receives a notice of conversion (the "Variable
Conversion Price"). The Variable Conversion Price may further be adjusted in connection with the terms of the Note. The Company shall at all times reserve
a minimum of six (6) times the number of its authorized and unissued common stock (the "Reserved Amounts"), free from
preemptive rights, to provide for the issuance of Common Stock upon the full conversion of the Note. Upon full conversion of each
Note, any shares remaining in such reserve shall be cancelled. The Company will, from time to time, increases the Reserved Amount
in accordance with the Company's obligations under the Note. Pursuant to the terms of the SPAs, for
so long as any of the Investors owns any shares of Common Stock issued upon conversion of a Note (the "Conversion Shares"),
the Company covenants to secure and maintain the listing of such shares of Common Stock. The Company is also subject to certain
customary negative covenants under the Notes and the SPAs, including but not limited to the requirement to maintain its corporate
existence and assets, subject to certain exceptions, and not to make any offers or sales of any security under circumstances that
would require registration of or stockholder approval for the Notes or the Conversion Shares. Convertible Promissory Note - April
2019 On April 20, 2019, the Company entered
into a Securities Purchase Agreement (the SPA") with an investor (an "Investor") the Investor purchased a 10% unsecured
convertible promissory note (the "Note") from the Company. The note is in the aggregate principal amount of $44,000
and a maturity date of January 19, 2020. After payment of transaction-related expenses of $4,000, net proceeds to the Company from
the Note totaled $40,000. The Company recorded these discounts and cost of $4,000 as a discount to the Note and fully amortized
as interest expense during the period. I n connection with the execution of the Note, we issued 50,000
shares of our common stock to the Note holder, the shares were recorded with a relative fair value of $0 as the notes were fully
discounted by derivative liability. The Company analyzed the Note for derivative
accounting consideration and determined that the embedded conversion option qualified as a derivative instrument, due to the variable
conversion price. As a result, at the time of issuance, the Company recognized derivative liability for the convertible note of
$55,592, of which $40,000 was recorded as debt discount and will be amortized during the term of the Note, and $15,592 was recorded
as day 1 derivative loss. On October 31, 2019,
the Company issued 310,527 shares of common stock for the conversion of $6,500 of the principal outstanding and $2,834 in fees
under one of the convertible notes. The total unamortized discount on the Notes
as of October 31, 2019 and July 31, 2019 were $11,366 and $26,668, respectively. The total principal balance outstanding as of
October 31, 2019 and July 31, 2019, were $37,500 and $44,000. The Company amortized $15,302 of debt discount as interest expense
during the three months ended October 31, 2019. The Investor is entitled
to, at its option, convert all or any amount of the principal amount and any accrued but unpaid interest of the Note into shares |
