| NOTE 8 - DEBT | Accrued
Judgement On
October 22, 2015, the Company entered into a Securities Purchase Agreement ("Purchase Agreement"), dated as of October
22, 2015, with LG Capital Funding, LLC ("LG"), pursuant to which the Company sold LG a convertible note in the principal
amount of $125,000 (the first of four such Convertible Notes each in the principal amount of $125,000 provided for under the Purchase
Agreement), bearing interest at the rate of 8% per annum (the "Convertible Note"). Each of the Convertible Notes issuable
under the Purchase Agreement provides for a 15% original issue discount ("OID"), such that the purchase price for each
Convertible Note is $106,250, and at each closing LG is entitled to be paid $6,000 for legal and other expenses. The Convertible
Note provides LG the right to convert the outstanding balance, including accrued and unpaid interest, of such Convertible Note
into shares of the Company's common stock at a price ("Conversion Price") for each share of common stock equal to 80%
of the lowest trading price of the common stock as reported on the National Quotations Bureau for the OTCQB exchange on which
the Company's shares are traded or any exchange upon which the common stock may be traded in the future, for the twenty prior
trading days including the day upon which a Notice of Conversion is received by the Company or its transfer agent. The Convertible
Note was payable, along with interest thereon, on October 22, 2016 and was in default. The convertible note had an OID of 15%,
which was recorded at $18,750 and which has been fully amortized. The Company recorded a debt discount of $44,643, which has also
been fully amortized. On
October 14, 2016, the Supreme Court of the State of New York County of Kings, in regards to LG Capital Funding, LLC v. EMS Find,
Inc., issued a judgment against EMS Find, Inc. in favor of LG Capital Funding, LLC, in the amount of $135,202, which includes
principal and interest (calculated as of September 29, 2016), in regards to the convertible promissory note dated October 22,
2015. The judgment includes an Information Subpoena with Restraining Notice, which addressed the EMS Find, Inc. bank account at
TD Bank. As a result of the judgment, the conversion feature of the note was eliminated and therefore, the associated derivative
liability was extinguished. As of June 30, 2017, the principal balance of the Convertible Note was recorded as accrued judgment
of $125,000, a current liability, and $34,835 of interest was accrued. On
May 4, 2018, the Company and LG Capital entered into a Forbearance Agreement related to the judgment. According to terms of the
Forbearance Agreement, the Company extinguished the debt in full by paying LG Capital $135,427 in April 2017 and $29,257 on July
11, 2018. Convertible
Notes Payable Convertible
notes payable, all classified as current, consist of the following:
June
30, 2018 June
30, 2017
Principal Debt Discount Original Issue Discount Net Principal Debt Discount Original Issue Discount Net
Global
Opportunity Group, LLC $ - $ - $ - $ - $ - $ - $ - $ -
A1
Solar Corp. - - - - - - -
River
North Equity, LLC - - - - 4,660 - - 4,660
Global
Opportunity Group, LLC - - - - 18,700 (7,379 ) (722 ) 10,599
EMA
Financial, LLC - - - - 8,916 (2,394 ) - 6,522
GPL
Ventures, LLC - - - - 10,000 (548 ) - 9,452
Global
Opportunity Group, LLC - - - - 10,000 (5,301 ) (625 ) 4,074
Howard
Schraub - - - - 16,500 (12,250 ) - 4,250
Howard
Schraub - - - - 20,000 (15,233 ) - 4,767
Total $ - $ - $ - $ - $ 88,776 $ (43,105 ) $ (1,347 ) $ 44,324
On
December 3, 2015, the Company issued a second convertible note to LG for $125,000. The Company recorded an OID of 15%, or $18,750,
and which has been fully amortized. The Company recorded a debt discount of $85,165, which has been fully amortized. The Company
sold $60,000 principal of the note to Global Opportunity Group, LLC (“Global”) on August 18, 2016, $40,000 principal
of the note and $462 accrued interest to GPL Ventures, LLC (“GPL”) on December 15, 2016 and sold $50,000 principal
of the note (including a $25,000 penalty added to principal) to Global on February 21, 2017. The note has been repaid in full
and no related derivative liability was recorded as of June 30, 2017. On
July 21, 2016, the Company entered into a convertible promissory note with Old Main Capital, LLC (“Old Main”) for
$33,333. The note matures on July 21, 2017 and bears interest at 10%. The convertible promissory note provided for an OID of $3,333,
a deduction of $1,250 for Old Main’s legal fees, and $2,500 for Old Main’s legal fees related to the equity purchase
agreement. Therefore, the net proceeds to the Company was $26,250. The Company recorded a debt discount and derivative liability
of $29,574. The debt discount and OID have been fully amortized. The conversion price is the lower of 65% of the lowest traded
price for the twenty consecutive trading days immediately preceding the applicable conversion date or the closing bid price on
the original issue date. On April 20, 2017, the Company and Old Main entered into a Settlement Agreement & Mutual Release
with respect to this note, resulting in penalties of $22,667 added to the note principal to bring the principal balance to $56,000
and requiring a principal payment of $30,000, which payment was financed by the issuance of a new convertible promissory to Global.
Pursuant to multiple conversions during April and May 2017, the remaining principal of $26,000 was extinguished through the issuance
of 230,123 shares of the Company’s common stock and accrued interest payable of $2,574 was written off. In April 2017, 52,000
shares of the Company’s common stock were issued to Old Main for penalties of $13,000. The note has been repaid in full
and no related derivative liability was recorded as of June 30, 2017. On
July 25, 2016, the Company entered into an equity purchase agreement with River North Equity, LLC (“River North”)
for up to $2,000,000. On July 25, 2016, the Company entered into a convertible promissory note with River North for $33,333. The
convertible promissory note had a maturity date of March 29, 2017 and bears interest at 10%. The convertible promissory note provided
for an OID of $3,333, a deduction of $4,000 for River North’s legal fees, and the Company recorded a debt discount of $30,051.
The conversion price is the lower of 65% of the lowest traded price for the twenty consecutive trading days immediately preceding
the applicable conversion date. On February 1, 2017, River North converted $2,037 principal and $1,744 accrued interest into 52,878
common shares of the Company. On April 20, 2017, the Company and River North entered into a Settlement Agreement & Mutual
Release with respect to this note, resulting in penalties of $17,955 added to the note principal to bring the principal balance
to $49,252 and requiring a principal payment of $30,000, which payment was financed by the issuance of a new convertible promissory
to Global Opportunity Group, LLC (“Global”). On June 2, 2017, River North converted $14,592 principal into 172,685
common shares of the Company, resulting in a principal balance of $4,660 as of June 30, 2017. As of June 30, 2017, the OID and
the debt discount had been fully amortized and there was accrued interest payable of $1,236. The Company recorded a derivative
liability of $5,227 as of June 30, 2017. On July 5, 2017, River North converted the remaining principal of $4,660 into 183,068
common shares of the Company and the accrued interest payable balance of $1,236 was written off. The note has been repaid in full
and no related derivative liability was recorded as of June 30, 2018. On
August 10, 2016, the Company issued a convertible promissory note with Global for $16,500. The convertible promissory note has
a maturity date of August 10, 2017 and bears interest at 12%. The convertible promissory note provided for an OID of $1,500, a
deduction of $1,000 for Global’s legal fees, and a debt discount of $16,500. The Company received net proceeds of $15,000.
The Company recorded a debt discount of $16,500 and a derivative liability of $16,793. The conversion price is 50% of the lowest
traded price for the twenty consecutive trading days immediately preceding the conversion date. Additionally, the Company issued
165,000 five-year warrants for common stock with an exercise price of $0.15 per share, subject to certain adjustments, and a cashless
exercise option. The Company sold $16,500 of the principal of the note to Howard Schraub (“Schraub”) on March 16,
2017 and wrote off accrued interest payable of $1,063. As of June 30, 2017, the OID and the debt discount had been fully amortized.
The note has been repaid in full and no related derivative liability was recorded as of June 30, 2017. On
August 18, 2016, Global purchased $60,000 of the December 2015 LG convertible promissory note. The conversion price is 50% of
the lowest traded price for the twenty consecutive trading days immediately preceding the conversion date. The acquisition was
in two tranches, $30,000 each, thirty days apart. The Company recorded a debt discount of $60,000 and a derivative liability of
$68,651. In multiple conversions during August 2016 through January 2017, Global converted $68,593 principal (including a penalty
of $8,593 added to principal), $101 accrued interest payable and $5,000 in fees into 249,444 shares of the Company’s common
stock. The replacement note has been repaid in full and no related derivative liability was recorded as of June 30, 2017.
On
August 23, 2016, the Company entered into a convertible promissory note with EMA Financial, LLC (“EMA”), for $33,000.
The convertible promissory note had a maturity date of August 23, 2017 and bears interest at 16%. The convertible promissory note
provided for an OID of $3,300, a deduction of $3,000 for EMA’s legal fees, and a debt discount of $33,000. The Company received
net proceeds of $29,700. The Company recorded a debt discount of $33,000 and a derivative liability of $41,947. The conversion
price is the lower of 50% of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable
conversion date or the closing bid price on the original issue date. In April 2017, penalties totaling $8,249 were added to the
note principal. Pursuant to multiple conversions in March and April 2017, EMA converted the entire principal of $41,249 into 503,152
shares of the Company’s common stock and wrote off $3,172 accrued interest payable. As of June 30, 2017, the OID and the
debt discount had been fully amortized. The note has been repaid in full and no related derivative liability was recorded as of
June 30, 2017. On
October 6, 2016, the Company entered into a convertible promissory note with EMA for $33,000. The note matures on October 6, 2017
and bears interest at 12%. The Company recorded a debt discount of $33,000 and a derivative liability of $45,358. The conversion
price is the lower of 50% of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable
conversion date or the closing bid price on the original issue date. Pursuant to multiple conversions in May and June 2017, EMA
converted principal of $24,084 into 976,000 shares of the Company’s common stock, resulting in a principal balance of $8,916
as of June 30, 2017. As of June 30, 2017, $30,606 of the debt discount had been amortized, and there was accrued interest of $2,677.
The Company recorded a derivative liability of $10,411 as of June 30, 2017. On July 5, 2017, July 7, 2017 and July 12, 2017, EMA
converted the remaining principal of $8,916, accrued interest payable of $2,715 and penalties totaling $29,908 into a total of
830,776 common shares of the Company. The OID and the debt discount have been fully amortized. The note has been repaid in full
and no related derivative liability was recorded as of June 30, 2018. On
December 2, 2016, the Company entered into a convertible promissory note with Global for $18,700. The note matures on December
2, 2017 and bears interest at 12%. The convertible promissory note provided for an OID of $1,700; therefore, the net proceeds
to the Company was $17,000. The Company recorded a debt discount and a derivative liability of $17,376. The conversion price is
the lower of 50% of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable conversion
date or the closing bid price on the original issue date. As of June 30, 2017, $978 of the OID had been amortized, $9,997 of the
debt discount had been amortized and there was accrued interest of $1,297. The Company recorded a derivative liability of $17,336
as of June 30, 2017. Additionally, the Company issued 1,650 five-year warrants for common stock with an exercise price of $7.50
per share, subject to certain adjustments, and a cashless exercise option. On July 13, 2017 and August 15, 2017, Global converted
the entire principal of $18,700 and fees totaling $1,250 into a total of 567,867 common shares of the Company and the accrued
interest payable balance of $1,541 was written off. The OID and the debt discount have been fully amortized. The note has been
repaid in full and no related derivative liability was recorded as of June 30, 2018. On
December 13, 2016, the Company entered into a convertible promissory note with GPL Ventures LLC (‘GPL”) for $10,000.
The note matures on July 13, 2017 and bears interest at 12%. The Company recorded a debt discount and derivative liability of
$8,932. The conversion price is the lower of 50% of the lowest traded price for the twenty consecutive trading days immediately
preceding the applicable conversion date or the closing bid price on the original issue date. As of June 30, 2017, $8,384 of the
debt discount had been amortized, and there was accrued interest of $658. The Company recorded a derivative liability of $10,172
as of June 30, 2017. On July 6, 2017 and July 12, 2017, GPL converted the entire principal of $10,000 into a total of 400,000
common shares of the Company and the accrued interest payable balance of $687 was written off. The OID and the debt discount have
been fully amortized. The note has been repaid in full and no related derivative liability was recorded as of June 30, 2018. On
December 15, 2016, GPL purchased $40,000 principal and $462 accrued interest of the December 2015 LG convertible promissory note.
The replacement convertible promissory note with GPL for $40,462 matures on July 15, 2017 and bears interest at 10%. The Company
recorded a debt discount and derivative liability of $35,764. The conversion price is the lower of 50% of the lowest traded price
for the twenty consecutive trading days immediately preceding the applicable conversion date or the closing bid price on the original
issue date. Pursuant to three conversions in December 2016 through February 2017, GPL converted $1,270 principal into 254,000
shares of the Company’s common stock. On May 12, 2017, the Company and GPL entered into a Settlement and Release Agreement
pursuant to which the remaining principal of $39,192 and accrued interest payable of $1,604 were extinguished. As of June 30,
2017, the debt discount had been fully amortized. The note has been repaid in full and no related derivative liability was recorded
as of June 30, 2017.
On
February 13, 2017, the Company entered into a convertible promissory note with Global for $10,000. The note matures on February
13, 2018 and bears interest at 2%. The convertible promissory note provides for an OID of $1,000. Therefore, the net proceeds
to the Company was $9,000. The Company recorded a debt discount and derivative liability of $8,487. The conversion price is 50%
of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable conversion date. As of
June 30, 2017, $375 of the OID had been amortized, $3,186 of the debt discount had been amortized and there was accrued interest
of $75. The Company recorded a derivative liability of $8,482 as of June 30, 2017. Additionally, the Company issued 6,667 seven-year
warrants for common stock with an exercise price of $0.50 per share, subject to certain adjustments, and a cashless exercise option.
On September 15, 2017, Global sold the $10,000 note and $1,117 accrued interest payable to A1 Solar Corp (“A1 Solar”).
The OID and the debt discount have been fully amortized. The note has been repaid in full and no related derivative liability
was recorded as of June 30, 2018. On
February 21, 2017, Global purchased $50,000 principal of the December 2015 LG convertible promissory note. The $50,000 replacement
note matures on February 21, 2018 and interest does not accrue prior to an event of default or the maturity date. The Company
recorded a debt discount and derivative liability of $41,976. The conversion price is 50% of the lowest traded price for the twenty
consecutive trading days immediately preceding the applicable conversion date. Pursuant to four conversions in February 2017 through
March 2017, Global converted $34,159 principal and $2,000 in fees into 358,460 shares of the Company’s common stock. On
April 25, 2017, the Company sold the remaining $15,841 principal to Howard Schraub (“Schraub”). As of June 30, 2017,
the debt discount had been fully amortized and no related derivative liability was recorded. On
March 16, 2017, Schraub purchased $16,500 principal of the August 10, 2016 Global convertible promissory note. The $16,500 replacement
note matures on March 16, 2018 and bears interest at 12%. The Company recorded a debt discount of $16,500 and a derivative liability
of $18,844. The conversion price is 50% of the lowest traded price for the twenty consecutive trading days immediately preceding
the applicable conversion date. Pursuant to two conversions in March and April 2017, Schraub converted the entire principal of
$16,500 and $400 in fees into 160,011 shares of the Company’s common stock. As of June 30, 2017, the debt discount had been
fully amortized and accrued interest of $57 was written off. The note has been repaid in full and no related derivative liability
was recorded as of June 30, 2017. On
March 28, 2017, the Company entered into a convertible promissory note with Schraub for $16,500. The note matures on March 28,
2018 and bears interest at 10%. The Company recorded a debt discount of $16,500 and a derivative liability of $19,999. The conversion
price is 50% of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable conversion
date. Additionally, the Company issued 12,100 seven-year warrants for common stock with an exercise price of $0.50 per share,
subject to certain adjustments, and a cashless exercise option. These warrants were surrendered to the Company and cancelled on
May 8, 2017. As of June 30, 2017, $4,250 of the debt discount had been amortized and there was accrued interest of $425. The Company
recorded a derivative liability of $15,161 as of June 30, 2017. On July 31, 2017, Schraub assigned the $16,500 note to Global.
The debt discount has been fully amortized and $565 of accrued interest payable was written off. The note has been repaid in full
and no related derivative liability was recorded as of June 30, 2018. On
March 28, 2017, the Company issued a convertible promissory note with Global for $18,150. The note matures on March 28, 2018 and
bears interest at 10%. The convertible promissory note provides for an OID of $1,750. Therefore, the net proceeds to the Company
was $16,400. The Company recorded a debt discount of $18,150 and a derivative liability of $21,608. The conversion price is 50%
of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable conversion date. Additionally,
the Company issued 605,000 seven-year warrants for common stock with an exercise price of $0.01 per share, subject to certain
adjustments, and a cashless exercise option. On April 4, 2017, the Company and Global entered into a Purchase, Exchange and Escrow
Agreement pursuant to which $18,150 principal and $35 accrued interest payable were extinguished through assignment to Global
of $50,000 of the Viva Entertainment note receivable (see Note 4). As of June 30, 2017, the OID and debt discount had been fully
amortized. The note has been repaid in full and no related derivative liability was recorded as of June 30, 2017. The warrants
were surrendered to the Company and cancelled pursuant to the Purchase, Exchange and Escrow Agreement. On
April 4, 2017, the Company entered into a convertible promissory note with Schraub for $20,000. The note matures on April 4, 2018
and bears interest at 10%. A debt discount of $20,000 and a derivative liability of $23,381 were recorded. The conversion price
is 50% of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable conversion date.
Additionally, the Company issued 15,000 seven-year warrants for common stock with an exercise price of $0.50 per share, subject
to certain adjustments, and a cashless exercise option. These warrants were surrendered to the Company and cancelled on May 8,
2017. As of June 30, 2017, $4,767 of the debt discount had been amortized and there was accrued interest of $477. The Company
recorded a derivative liability of $17,756 as of June 30, 2017. On July 31, 2017, Schraub assigned the $20,000 note to Global.
The debt discount has been fully amortized and $647 of accrued interest payable was written off. The note has been repaid in full
and no related derivative liability was recorded as of June 30, 2018.
On
April 13, 2017, the Company issued a convertible promissory note with Global for $30,000 to partially fund the settlement with
Old Main discussed above. The note matures on April 13, 2018 and bears interest at 10%. The Company recorded a debt discount of
$30,000 and a derivative liability of $34,825. The conversion price is 50% of the lowest traded price for the twenty-five consecutive
trading days immediately preceding the applicable conversion date. Pursuant to two conversions in April and May 2017, Global converted
$18,284 principal and $1,200 in fees into 222,680 shares of the Company’s common stock. On June 6, 2017, the Company sold
the remaining $11,716 principal to Schraub. As of June 30, 2017, the debt discount had been fully amortized. The note has been
repaid in full and no related derivative liability was recorded as of June 30, 2017. On
April 25, 2017, Schraub purchased a convertible promissory note from Global with a principal balance of $15,841. The note matures
on March 28, 2018 and is non-interest bearing. The Company recorded a debt discount of $15,481 and a derivative liability of $17,787.
The conversion price is 50% of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable
conversion date. Pursuant to two conversions in April and May 2017, Schraub converted the entire principal of $15,841 and $500
in fees into 195,559 shares of the Company’s common stock. As of June 30, 2017, the debt discount had been fully amortized.
The note has been repaid in full and no related derivative liability was recorded as of June 30, 2017. On
May 16, 2017, the Company issued a convertible promissory note with Global for $30,000 to partially fund the settlement with River
North discussed above. The note matures on May 16, 2018 and bears interest at 10%. The Company recorded a debt discount of $30,000
and a derivative liability of $36,823. The conversion price is 50% of the lowest traded price for the twenty-five consecutive
trading days immediately preceding the applicable conversion date. Pursuant to two conversions in June 2017, Global converted
$18,009 principal and $1,200 in fees into 362,180 shares of the Company’s common stock. On June 30, 2017, the Company and
Global entered into a Purchase, Exchange and Escrow Agreement and Cancellation pursuant to which the remaining principal of $11,991
and $280 accrued interest payable were extinguished through the exchange with Global of a note receivable from Viva Entertainment
with a principal balance of $8,985 and accrued interest receivable of $184 (see Note 4). As of June 30, 2017, the debt discount
had been fully amortized. The note has been repaid in full and no related derivative liability was recorded as of June 30, 2017. On
June 6, 2017, Schraub purchased a convertible promissory note from Global with a principal balance of $11,716. The note matures
on March 13, 2018 and bears interest at 10%. The Company recorded a debt discount and derivative liability of $10,683. The conversion
price is 50% of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable conversion
date. Pursuant to two conversions in June 2017, Schraub converted the entire principal of $11,716 and $600 in fees into 381,070
shares of the Company’s common stock. As of June 30, 2017, the debt discount had been fully amortized. The note has been
repaid in full and no related derivative liability was recorded as of June 30, 2017. On
July 31, 2017, Global was assigned the $16,500 principal of the March 28, 2017 Schraub convertible promissory note. The note matures
on March 28, 2018 and bears interest at 10%. A debt discount of $16,500 and a derivative liability of $17,406 were recorded. The
conversion price is 50% of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable
conversion date. On January 5, 2018, Global converted principal of $16,500 and accrued interest of $1,279 into 88,093 common shares
of the Company. The debt discount has been fully amortized. The note has been repaid in full and no related derivative liability
was recorded as of June 30, 2018. On
July 31, 2017, Global was assigned the $20,000 principal of the April 4, 2017 Schraub convertible promissory note. The note matures
on April 4, 2018 and bears interest at 10%. A debt discount of $20,000 and a derivative liability of $21,097 were recorded. The
conversion price is 50% of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable
conversion date. Pursuant to two conversion in October and December 2017 Global converted a total of $7,926 principal into 348,691
total common shares of the Company. Pursuant to a Purchase and Escrow Agreement dated December 31, 2017 (Note 4), the remaining
principal of $12,074 and accrued interest payable of $1,367 were extinguished. The debt discount has been fully amortized and
$647 of accrued interest payable was written off. The note has been repaid in full and no related derivative liability was recorded
as of June 30, 2018. On
September 15, 2017, A1 Solar purchased $10,000 principal and $1,117 accrued interest payable of the February 13, 2017 Global convertible
promissory note. The $11,117 convertible replacement note matures on September 29, 2018 and bears interest at an annual rate of
12%. The Company recorded a debt discount of $11,117 and a derivative liability of $13,348. The conversion price is 50% of the
lowest traded price for the twenty consecutive trading days immediately preceding the applicable conversion date. On October 5,
2017 and January 10, 2018, A1 Solar converted $11,117 principal and accrued interest of $77 into 322,018 total common shares of
the Company. The debt discount has been fully amortized. The note has been repaid in full and no related derivative liability
was recorded as of June 30, 2018. On
December 30, 2017, the Company and Global entered into an Exchange Agreement pursuant to which warrants held by Global to purchase
a total of 11,115 shares of the Company’s common stock were cancelled in exchange for a convertible promissory note payable
to Global in the principal amount of $25,000. The note matures on December 30, 2018 and bears interest at an annual rate of 5%,
compounded monthly. A debt discount of $25,000 and a derivative liability of $324,629 was recorded. Pursuant to a Purchase and
Escrow Agreement dated December 31, 2017 (Note 4), the $25,000 principal and accrued interest payable of $3 were extinguished.
The note has been repaid in full and no related derivative liability was recorded as of June 30, 2018. On
July 6, 2017, Schraub converted fees of $600 into 12,370 common shares of the Company. As
detailed above, during the year ended June 30, 2017, a total of 4,118,242 shares of the Company’s common stock were issued
in conversion of $284,083 note principal and $1,884 accrued interest payable. In addition, derivative liabilities of $324,916
were extinguished and note penalties of $35,985 and fees of $10,900 were paid through the issuance of common stock in the note
conversions. During
the year ended June 30, 2018, a total of 2,752,883 shares of the Company’s common stock were issued in conversion of $77,818
note principal and $4,072 accrued interest payable. In addition, derivative liabilities of $78,412 were extinguished and note
penalties of $29,909 and fees of $2,950 were paid through the issuance of common stock in the note conversions. |
