| Convertible Notes Payable | NOTE 6 - CONVERTIBLE NOTES PAYABLE On March 7, 2014, the Company issued
a convertible promissory note in the amount of $100,000. The note is due on March 10, 2015 and bears interest at 8% per annum.
The loan is secured by shares of the CompanyÂ’s common stock. The loan becomes convertible 180 days after date of the note.
The loan and any accrued interest can then be converted into shares of the CompanyÂ’s common stock at a rate of 58% multiplied
by the market price, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading
day period ending on the latest complete trading day prior to the conversion date. Before the loan became convertible and prior
to June 30, 2014, the Company fully paid off this loan in cash and did not convert any portion of this note into shares of common
stock. The interest associated with this loan was $2,411, with an additional early payment fee of $24,846. On April 17, 2014, the Company issued
a convertible promissory note in the amount of $71,875. The note was due on April 16, 2015 and bears interest at 15% per annum,
which was prepaid by the Company and is being amortized over the life of the loan. The loan is secured by shares of the CompanyÂ’s
common stock. The loan becomes convertible 180 days after date of the note. The loan and any accrued interest can then be converted
into shares of the CompanyÂ’s common stock at a rate of 50% multiplied by the market price, which is the lowest quoted price
for the common stock during the 25 trading day period ending on the latest complete trading day prior to the conversion date. On October 14, 2014, the date the note
became convertible, the Company recorded a debt discount in the amount of $71,875 in connection with the initial valuation of the
derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note.
Further, the Company recognized a derivative liability of $98,735 and an initial loss of $26,860 based on the Black Scholes Merton
pricing model. As of June 30, 2015, $71,875 of the
debt discount has been amortized. The fair value of the derivative liability at the date of conversion was $90,476 resulting in
a gain on derivative liabilities of $8,259. As of June 30, 2015 and 2014 the note
had a balance of $0 and $71,875 respectively. During the year ended June 30, 2015, in accordance with the
terms of the Note, the holder fully converted the note for 3,683,532 shares of common stock. On April 30, 2014, the Company issued
a convertible promissory note with available funds of $250,000, however, the Company only received one tranche payment of $60,000
from this note, carrying a loan balance of $66,000 with principal and OID. There is an original discount component of 10% per tranche.
The note is due on April 30, 2016 and bears interest at 0% if repaid within 90 days; and 12% per annum for any remaining balances
past 90 days. The loan is secured by shares of the CompanyÂ’s common stock. The loan becomes convertible immediately upon
the date of the note. The loan and any accrued interest can then be converted into shares of the CompanyÂ’s common stock at
a rate of the lower of (1) $0.11per share or (2) 60% multiplied by the market price, which is the lowest quoted price for the common
stock during the 25 trading day period ending on the latest complete trading day prior to the conversion date. During the year
ended June 30, 2014, the Company fully paid off this loan in cash and did not convert any portion of this note into shares of common
stock. The interest associated with this loan was $667. On April 18, 2014, the Company issued
a convertible promissory note in which the Company will be taking tranche payments on pre-defined dates, the total of these payments
cannot exceed $650,000. There is an original discount component of 10% per tranche and an additional expense fee of $5,000. Therefore,
the funds available to the Company will be $650,000 and the liability (net of interest) will be $750,000 when all disbursements
have been received by the Company. Each tranche is accounted for separately with each principal and OID balance becoming due 18
months after receipt. Each tranche bears interest at 8% per annum. The loan is secured by shares of the CompanyÂ’s common
stock. Each portion of the loan becomes convertible 180 days after date of the note. The loan and any accrued interest can then
be converted into shares of the CompanyÂ’s common stock at a rate of 50% multiplied by the market price, which is the lowest
quoted price for the common stock during the 20 trading day period ending on the latest complete trading day prior to the conversion
date. During the year ended June 30, 2015,
the Company received six additional tranche disbursements of $50,000 on July 15, 2014, $100,000 on September 30, 2014, $50,000
on November 3, 2014, $50,000 on December 1, 2014, $50,000 on December 29, 2014, and $50,000 on February 2, 2015. On July 20, 2015, the Company entered
into a settlement agreement with the holder of the convertible note. Under the agreement the note holder agreed to not to seek
to enforce its rights or remedies under the Note in relation to the notice of conversion issued to convert a balance of the note
amounting to $57,933; to not to exercise its rights of conversion pursuant to the Note, and if an event of default occurs, the
Holder agrees not to sell any shares of common stock of the Company having an aggregate conversion value of $30,000 or more per
week until such time as it has sold all of the CompanyÂ’s common stock that it owns. Under the agreement the Company agreed
to a penalty in relation to the note in the amount of $95,000 which was due and has been accrued as of June 30, 2015; to release
the holder from its obligation to advance additional funds to the Company; and to pay or refinance the amount due under the note
plus accrued interest in four installment payments due on July 20, 2015, August 10, 2015, September 14, 2015 and October 12, 2015.
In respect of prepayment penalties payable
to the Holder pursuant to the Note, the Company agreed to issue to the Holder additional convertible promissory notes with each
having the same form, terms, and conditions as the original note. The value of the notes, which are due by each installment payment
date, are equal to 30% of the payment delivered. After refinancing the payments due on
July 20, 2015 and August 10, 2015, the Company and the noteholder agreed to allow the note holder to convert the notes as agreed
upon in the original note agreement. As such, in accordance with the agreement Company only issued two additional notes related
to the prepayment penalty discussed above. The following details the disbursements
as of June 30, 2015:
Tranche Date Principal with OID Accrued Interest Converted to Stock Balance - June 30, 2015
April 21, 2014 $ 110,776 $ 6,167 $ 116,943 -
May 6, 2014 55,384 4,443 $ 59,827 -
June 11, 2014 55,384 5,147 None 55,384
July 16, 2014 55,384 4,236 None 55,384
September 30, 2014 110,768 6,628 None 110,768
November 3, 2014 55,384 2,901 None 55,384
December 1, 2014 55,384 2,312 None 55,384
December 29, 2014 55,384 2,005 None 55,384
February 2, 2015 55,384 1,797 None 55,384
Unamortized Original Issue Discount (21,040 ) - (21,040 )
$ 588,192 $ 35,636 422,032 During the period ended June 30, 2014,
the Company has received three tranche disbursements of $100,000 on April 21, 2014; $50,000 on May 6, 2014; and $50,000 on June
11, 2014. The following details the disbursements
as of June 30, 2014:
Tranche Date Principal with OID Accrued Interest Converted to Stock Balance - June 30, 2014
April 21, 2014 $ 110,776 $ 1,724 None 110,776
May 6, 2014 55,384 680 None 55,384
June 11, 2014 55,384 243 None 55,384
Unamortized Original Issue Discount - - -
$ 221,544 $ 2,647 221,544 During the year ended June 30, 2015
and 2014, $16,648 and $27,554 of the debt discount related to the outstanding tranches was amortized, respectively. The Notes are shown net of an unamortized
original issue discount of $21,040 and $0 as of June 30, 2015 and 2014, respectively. The Company analyzed the conversion
options embedded in the Convertible Promissory Notes for derivative accounting consideration under ASC 815, Derivatives and Hedging,
and determined that eight tranches received on April 21, 2014, May 6, 2014, June 11, 2014, July 16, 2014, and September 30, 2014,
November 3, 2014, December 1, 2014, and December 29, 2014 were convertible during the year ended June 30, 2015. In accordance with the terms of the
Note, the holder fully converted the tranche issued on April 21, 2014 during the year ended June 30, 2015 for 3,711,969 shares
of common stock for principal and accrued interest of $116,943. The Company recorded a debt discount in the amount of $110,776
in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest
method of accretion over the term of the note. Further, the Company recognized a derivative liability of $192,038 and an initial
loss of $81,262 based on the Black Scholes Merton pricing model. As of June 30, 2015, $110,776 of the
debt discount has been amortized. The fair value of the derivative liability at the date of conversion was $209,614. On October 21, 2014, the Note issued
on May 6, 2014 became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount
of $55,384 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective
interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $95,215 and an
initial loss of $39,831 based on the Black Scholes Merton pricing model. In accordance with the terms of the
Note, the holder has fully converted the tranche during the year ended June 30, 2015 for 4,943,581 shares of common stock for principal
and interest of $59,827. As of June 30, 2015, $55,384 of the
debt discount has been amortized. The fair value of the derivative liability at the date of conversion was $92,993. On December 8, 2014, the Note issued
on June 11, 2014 became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount
of $55,384 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective
interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $90,678 and initial
loss on derivative liability of $35,294 based on the Black Scholes Merton pricing model. As of June 30, 2015, $30,702 of the
debt discount has been amortized. The fair value of the derivative liability at June 30, 2015 is $91,995 resulting in a loss on
the change in fair value of the derivative of $1,317. The Note is shown net of a derivative debt discount of $24,682 at June 30,
2015. On January 12, 2015, the Note issued
on July 16, 2014 became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount
of $55,384 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective
interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $91,094 and initial
loss on derivative liability of $35,710 based on the Black Scholes Merton pricing model. As of June 30, 2015, $25,366 of the
debt discount has been amortized. The fair value of the derivative liability at June 30, 2015 is $96,644 resulting in a loss on
the change in fair value of the derivative of $5,550. The Note is shown net of a derivative debt discount of $30,018 at June 30,
2015. On March 29, 2015, the Note issued on
September 30, 2014 became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount
of $110,768 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective
interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $182,755 and
initial loss on derivative liability of $71,987 based on the Black Scholes Merton pricing model. As of June 30, 2015, $28,069 of the
debt discount has been amortized. The fair value of the derivative liability at June 30, 2015 is $213,077 resulting in a loss on
the change in fair value of the derivative of $30,322. The Note is shown net of a derivative debt discount of $82,699 at June 30,
2015. On May 2, 2015, the Note issued on November
3, 2014 became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $55,384
in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest
method of accretion over the term of the note. Further, the Company recognized a derivative liability of $94,120 and initial loss
on derivative liability of $38,736 based on the Black Scholes Merton pricing model. As of June 30, 2015, $8,904 of the debt
discount has been amortized. The fair value of the derivative liability at June 30, 2015 is $109,960 resulting in a loss on the
change in fair value of the derivative of $15,840. The Note is shown net of a derivative debt discount of $46,480 at June 30, 2015. On May 30, 2015, the Note issued on
December 1, 2014 became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount
of $55,384 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective
interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $95,257 and initial
loss on derivative liability of $39,873 based on the Black Scholes Merton pricing model. As of June 30, 2015, $4,666 of the debt
discount has been amortized. The fair value of the derivative liability at June 30, 2015 is $115,438 resulting in a loss on the
change in fair value of the derivative of $20,181. The Note is shown net of a derivative debt discount of $50,718 at June 30, 2015. On June 29, 2015, the Note issued on
December 29, 2014 became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount
of $55,384 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective
interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $102,520 and
initial loss on derivative liability of $47,136 based on the Black Scholes Merton pricing model. As of June 30, 2015, $452 of the debt
discount has been amortized. The fair value of the derivative liability at June 30, 2015 is $116,072 resulting in a loss on the
change in fair value of the derivative of $13,552. The Note is shown net of a derivative debt discount of $54,932 at June 30, 2015. Derivative liability for these notes
were valued under the Black-Scholes model, with the following assumptions:
Fair value assumptions – derivative notes: June 30, 2015
Risk free interest rate 0.09-0.64 %
Expected term (years) 0.45-1.01
Expected volatility 198-288 %
Expected dividends 0 % On October 1, 2014, the Company issued
a short-term convertible promissory note in the amount of $70,000 for $50,000 cash, an original issue discount of $12,500, and
prepaid interest of $7,500. The note was due on March 30, 2015 and bears interest at 15% per annum, which was prepaid by the Company
and is being amortized over the life of the loan. The loan is secured by shares of the CompanyÂ’s common stock. The loan becomes
convertible 180 days after date of the note. The loan and any accrued interest can then be converted into shares of the CompanyÂ’s
common stock at a rate of 50% multiplied by the market price, which is the lowest quoted price for the common stock during the
25 trading day period ending on the latest complete trading day prior to the conversion date. During the year ended June 30, 2015,
$12,500 of the debt discount has been amortized. The note matured on March 30, 2015. During the year ended June 30, 2015,
the holder of the note exercised his right to convert $56,000 of the note balance into 3,789,297 shares of common stock. The fair
value of the derivative liability related to the converted debt at date of conversion was $79,464. The Company elected to prepay the entire
termÂ’s interest of $7,500. This payment was capitalized as a prepaid asset and has been amortized over the term of the note.
The interest expense related to this loan was $0 for the year ending June 30, 2014 and $7,500 for the year ended June 30, 2015.
As of June 30, 2015 the remaining prepaid interest balance was $0. On March 30, 2015, the Note became convertible
at the option of the holder. On this date the Company recorded a debt discount in the amount of $70,000 in connection with the
initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion
over the term of the note. Further, the Company recognized a derivative liability of $70,014 and initial loss of $14 based on the
Black Scholes Merton pricing model. As of June 30, 2015, $70,000 of the
debt discount has been amortized. The fair value of the derivative liability at June 30, 2015 is $20,632 resulting in a loss on
the change in fair value of the derivative of $30,082. The Note is shown net of a debt discount of $0 at June 30, 2015. On November 17, 2014, the Company issued
a short-term convertible promissory note in the amount of $70,000, which consisted of cash proceeds of $50,000, a debt discount
of $12,500 and prepaid interest of $7,500. The note is due on November 14, 2015 and bears interest at 15% per annum, which was
prepaid by the Company and is being amortized over the life of the loan. The loan is secured by shares of the CompanyÂ’s common
stock. The loan becomes convertible 180 days after date of the note. The loan and any accrued interest can then be converted into
shares of the CompanyÂ’s common stock at a rate of 50% multiplied by the market price, which is the lowest quoted price for
the common stock during the 25 trading day period ending on the latest complete trading day prior to the conversion date. During
the year ended June 30, 2015, $7,769 of the debt discount has been amortized. The Note is shown net of an unamortized debt discount
of $4,731 at June 30, 2015. During the year ended June 30, 2015,
the holder of the note exercised his right to convert $35,000 of the note balance into 4,404,515 shares of common stock. The fair
value of the derivative liability related to the converted debt at date of conversion was $54,323. During the year ended June 30, 2015,
the Company elected to prepay the entire termÂ’s interest of $7,500. This payment was capitalized as a prepaid asset and has
been amortized over the term of the note. The interest expense related to this loan was $4,651 and $0 for the year ending June
30, 2015 and 2014. As of June 30, 2015 and 2014 the remaining prepaid interest balance was $2,849 and $0, respectively. On May 16, 2015, the Note became convertible
at the option of the holder. On this date the Company recorded a debt discount in the amount of $70,000 in connection with the
initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion
over the term of the note. Further, the Company recognized a derivative liability of $93,179 and initial loss of $23,179 based
on the Black Scholes Merton pricing model. As of June 30, 2015, $17,308 of the
debt discount has been amortized. The fair value of the derivative liability at June 30, 2015 is $56,108 resulting in a loss on
the change in fair value of the derivative of $17,252. The Note is shown net of a derivative discount of $52,692 at June 30, 2015. On December 23, 2014, the Company issued
a short-term convertible promissory note in the amount of $70,000, which consisted of cash proceeds of $50,000, a debt discount
of $12,500 and prepaid interest of $7,500. The note is due on December 18, 2015 and bears interest at 15% per annum, which was
prepaid by the Company and is being amortized over the life of the loan. The loan is secured by shares of the CompanyÂ’s common
stock. The loan becomes convertible 180 days after date of the note. The loan and any accrued interest can then be converted into
shares of the CompanyÂ’s common stock at a rate of 50% multiplied by the market price, which is the lowest quoted price for
the common stock during the 25 trading day period ending on the latest complete trading day prior to the conversion date. During
the year ended June 30, 2015, $6,562 of the debt discount has been amortized. The Note is shown net of an unamortized debt discount
of $5,938 at June 30, 2015. The Company elected to prepay the entire
termÂ’s interest of $7,500. This payment was capitalized as a prepaid asset and has been amortized over the term of the note.
The interest expense related to this loan was $3,927 and $0 for the year ending June 30, 205 and 2014. As of June 30, 2015, the
remaining prepaid interest balance was $3,573. On June 21, 2015, the Note became convertible
at the option of the holder. On this date the Company recorded a debt discount in the amount of $70,000 in connection with the
initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion
over the term of the note. Further, the Company recognized a derivative liability of $104,711 and initial loss of $34,711 based
on the Black Scholes Merton pricing model. As of June 30, 2015, $3,500 of the debt
discount has been amortized. The fair value of the derivative liability at June 30, 2015 is $116,694 resulting in a loss on the
change in fair value of the derivative of $11,983. The Note is shown net of a derivative discount of $66,500 at June 30, 2015. On January 13, 2015, the Company issued
a short-term convertible promissory note in the amount of $74,000. The note is due on October 15, 2015 and bears interest at 8%
per annum. The loan is secured by shares of the CompanyÂ’s common stock. The loan becomes convertible 180 days after date
of the note. The loan and any accrued interest can then be converted into shares of the CompanyÂ’s common stock at a rate
of 58% multiplied by the market price, which is the average of the lowest three quoted prices for the common stock during the 10
trading day period ending on the latest complete trading day prior to the conversion date. As of June 30, 2015, the note has not
become convertible. On January 26, 2015, the Company issued
a convertible promissory note in which the Company will be taking tranche payments based on amounts determined by the note holder
for total payments of not more than $250,000. There is an original discount component of $25,000. Therefore, the funds available
to the Company will be $225,000 and the liability (net of interest) will be $250,000 when all disbursements have been received
by the Company. Each tranche is accounted for separately with each principal and OID balance becoming due 24 months after receipt.
Each tranche bears interest at 12% per annum. The loan is secured by shares of the CompanyÂ’s common stock. Each portion of
the loan becomes convertible immediately upon issuance. The loan and any accrued interest can then be converted into shares of
the CompanyÂ’s common stock at a rate of the lesser of $0.045 per share or 60% multiplied by the market price per share, which
is the lowest quoted price for the common stock during the 25 trading day period ending on the latest complete trading day prior
to the conversion date. During the period ended June 30, 2015, the Company has received two tranche disbursements of $75,000 on
January 26, 2015 and 25,000 on April 28, 2015. During the year ended June 30, 2015,
$1,808 of the debt discount has been amortized. The Notes are shown net of an unamortized debt discount of $8,192 at June 30, 2015. On January 26, 2015, the first trance
became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $82,500 in connection
with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion
over the term of the note. Further, the Company recognized a derivative liability of $135,740 and initial loss on derivative liabilities
of $53,240 based on the Black Scholes Merton pricing model. As of June 30, 2015, $17,517 of the
debt discount has been amortized. The fair value of the derivative liability at June 30, 2015 was $152,892 resulting in a loss
on the change in fair value of the derivative of $17,152. The Note is shown net of a derivative discount of $64,983 at June 30,
2015. On April 28, 2015, the second trance
became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $27,500 in connection
with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion
over the term of the note. Further, the Company recognized a derivative liability of $44,209 and initial loss on derivative liabilities
of $16,709 based on the Black Scholes Merton pricing model. As of June 30, 2015, $2,373 of the debt
discount has been amortized. The fair value of the derivative liability at June 30, 2015 was $54,756 resulting in a loss on the
change in fair value of the derivative of $10,547. The Note is shown net of a debt discount of $25,127 at June 30, 2015. On April 15, 2015, the Company issued
a short-term convertible promissory note in the amount of $70,000 for $50,000 cash, an original issue discount of $9,500, and prepaid
interest of $10,500. The note is due on April 15, 2016 and bears interest at 15% per annum, which was prepaid by the Company and
is being amortized over the life of the loan. The loan is secured by shares of the CompanyÂ’s common stock. The loan becomes
convertible 180 days after date of the note. The loan and any accrued interest can then be converted into shares of the CompanyÂ’s
common stock at a rate of 50% multiplied by the market price, which is the lowest quoted price for the common stock during the
25 trading day period ending on the latest complete trading day prior to the conversion date. During the year ended June 30, 2015,
$1,973 of the debt discount has been amortized and the note is shown net $7,527 in unamortized debt discount. As of June 30, 2015,
the note has not become convertible. On May 20, 2015, the Company issued
a convertible promissory note in the amount of $43,000 for $43,000 cash. The note is due on February 22, 2016 and bears interest
at 8% per annum. The loan becomes convertible 180 days after date of the note. The loan can then be converted into shares of the
CompanyÂ’s common stock at a rate of 58% multiplied by the market price, which is the average of the lowest three (3) quoted
price for the common stock during the 10 trading day period ending on the latest complete trading day prior to the conversion date.
As of June 30, 2015, the note has not become convertible. On June 7, 2015, the Company issued
a short-term convertible promissory note in the amount of $70,000 for $50,000 cash, an original issue discount of $9,500, and prepaid
interest of $10,500. The note is due on June 8, 2016 and bears interest at 15% per annum, which was prepaid by the Company and
is being amortized over the life of the loan. The loan is secured by shares of the CompanyÂ’s common stock. The loan becomes
convertible 180 days after date of the note. The loan and any accrued interest can then be converted into shares of the CompanyÂ’s
common stock at a rate of 50% multiplied by the market price, which is the lowest quoted price for the common stock during the
25 trading day period ending on the latest complete trading day prior to the conversion date. During the year ended June 30, 2015,
$595 of the debt discount has been amortized and the note is shown net $8,905 in unamortized debt discount. As of June 30, 2015,
the note has not become convertible. On June 19, 2015, the Company issued
a short-term convertible promissory note in the amount of $37,500 for $25,000 cash, an original issue discount of $6,875, and prepaid
interest of $5,625. The note is due on June 19, 2016 and bears interest at 15% per annum, which was prepaid by the Company and
is being amortized over the life of the loan. The loan is secured by shares of the CompanyÂ’s common stock. The loan becomes
convertible 180 days after date of the note. The loan and any accrued interest can then be converted into shares of the CompanyÂ’s
common stock at a rate of 50% multiplied by the market price, which is the lowest quoted price for the common stock during the
25 trading day period ending on the latest complete trading day prior to the conversion date. During the year ended June 30, 2015,
$207 of the debt discount has been amortized and the note is shown net $6,668 in unamortized debt discount. As of June 30, 2015,
the note has not become convertible. On June 28, 2015, the Company issued
a convertible promissory note in the amount of $150,000 for $100,000 cash, an original issue discount of $50,000. The note is due
on December 28, 2016 and bears interest at 15% per annum. The loan becomes convertible 180 days after date of the note. The loan
can then be converted into shares of the CompanyÂ’s common stock at a rate of 50% multiplied by the market price, which is
the lowest quoted price for the common stock during the 25 trading day period ending on the latest complete trading day to the
conversion date. During the year ended June 30, 2015, $182 of the debt discount has been amortized and the note is shown net $49,818
in unamortized debt discount. As of June 30, 2015, the note has not become convertible. On June 29, 2015, the Company issued
a convertible promissory note in which the Company will be taking tranche payments based on amounts determined by the note holder
for total payments of not more than $100,000. There is an original discount component of $10,000. Therefore, the funds available
to the Company will be $90,000 and the liability (net of interest) will be $100,000 when all disbursements have been received by
the Company. Each tranche is accounted for separately with each principal and OID balance becoming due 24 months after receipt.
Each tranche bears interest at 15% per annum. Each portion of the loan becomes convertible immediately upon issuance. The loan
and any accrued interest can then be converted into shares of the CompanyÂ’s common stock at a rate of the lesser of $0.02
per share or 50% multiplied by the market price per share, which is the lowest quoted price for the common stock during the 25
trading days immediately preceding the conversion date. During the period ended June 30, 2015, the Company has received one tranche
disbursements of $30,000 on June 29, 2015. During the year ended June 30, 2015,
$4 of the debt discount has been amortized. The Note is shown net of an unamortized debt discount of $2,996 at June 30, 2015. On June 29, 2015, the first trance became
convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $33,000 in connection
with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion
over the term of the note. Further, the Company recognized a derivative liability of $67,818 and initial loss on derivative liabilities
of $34,818 based on the Black Scholes Merton pricing model. As of June 30, 2015, $45 of the debt discount has been amortized. The
fair value of the derivative liability at June 30, 2015 is $79,498 resulting in a loss on the change in fair value of the derivative
of $11,680. The Note is shown net of a derivative debt discount of $32,955 at June 30, 2015. As of June 30, 2015, the company had
the below commitments related to its outstanding convertible notes payable.
Commitments: Amount
Within one year $ 801,188
After one year and within 5 years 348,384
Total $ 1,149,572 |
