| SECURED PROMISSORY AND CONVERTIBLE NOTES | NOTE
4 – SECURED PROMISSORY AND CONVERTIBLE NOTES Secured
Promissory Note On
December 2, 2018, the Company issued a Secured Promissory Note (“Secured Note”) to an accredited investor. The Secured Note
had an aggregate principal amount of $ 50,000 ,
and was payable on December
2, 2019 (the “Maturity Date”), and
borne an interest rate of 4%
per annum and a default interest rate of 18%
per annum. The amount owing under the Secured
Note was secured by the assets of the Company. The Secured Note might be converted into shares of common stock of the Company,
the terms of which were to be negotiated between the Company and the note holder. Interest expense for the nine months ended March
31, 2022 and 2021 was $ 2,391
and $ 7,121 ,
respectively. On
September 6, 2019, the Company issued a Secured Promissory Note (“Secured Note”) to an accredited investor. The Secured Note
had an aggregate principal amount of $ 50,000 ,
and was payable on September
6, 2020 (the “Maturity Date”), and
borne an interest rate of 4%
per annum and a default interest rate of 18%
per annum. The amount owing under the Secured
Note was secured by the assets of the Company. The note might be converted into shares of common stock of the Company,
the terms of which were to be negotiated between the Company and the note holder. Interest expense for the nine months ended March
31, 2022 and 2021, was $ 2,391
and $ 5,769 ,
respectively. On
October 1, 2020, the Company issued a Secured Promissory Note (“Secured Note”) to an accredited investor. The Secured Note
had an aggregate principal amount of $ 65,000 ,
and was payable on October
1, 2021 , (the “Maturity Date”), and
borne an interest rate of 4%
per annum and a default interest rate of 18% .
The amount owing under the Secured Note was secured by the assets of the Company. The note might be converted into shares
of common stock of the Company, the terms of which were to be negotiated between the Company and the note holder. Interest expense
for the nine months ended March 31, 2022 and 2021, was $ 655
and $ 1,289 ,
respectively. On
August 13, 2021, the Company issued a Secured Promissory Note (“Secured Note”) to an accredited investor. The Secured Note
had an aggregate principal amount of $ 40,000 ,
and was payable on August
13, 2022 , (the “Maturity Date”),
and borne an interest rate of 4%
per annum and a default interest rate of 18%
per annum. The amount owing under the Secured
Note was secured by the assets of the Company. The note might be converted, the terms of which were to be negotiated
between the Company and the note holder. Interest expense for the nine months ended March 31, 2022 and 2021, was $ 470
and $ nil ,
respectively. As
of September 30, 2021, each note holder had agreed to entered into a cancellation and release agreement to provide conclusive
evidence of the cancellation, settlement and full and final mutual release with respect to all and any rights, obligations and disputes
among the Parties arising under the Secured Note. There was no outstanding interest payable nor outstanding secured promissory
note. The cancellation of secured promissory notes and the cancellation of interest payable were recorded as a gain on the statements
of operations and comprehensive income (loss). The principal amount of $ 205,000 ,
plus accumulated interest of $ 33,941 ,
were forgiven. Unsecured
Convertible Promissory Notes On
June 28, 2017 the Company issued $ 20,000
of unsecured convertible promissory notes (“Convertible
Notes”). The notes were assigned to 5 different arm’s length parties, each holding $4,000. The Convertible Notes matured
on June
27, 2018 , and borne interest at a rate
of 8%
per annum, and 12%
for amounts owing past the default date. The
Convertible Notes were convertible into the Common Stock of the Company at a fixed conversion rate of $ 0.75
per share at any time prior to the maturity date.
The Company evaluated the terms and conditions of the Convertible Notes under the guidance of ASC 815, Derivatives and Hedging. The conversion
feature met the definition of conventional convertible for purposes of applying the conventional convertible exemption. The definition
of conventional contemplates a limitation on the number of shares issuable under the arrangement. The instrument was convertible into
a fixed number of shares and there were no down round protection features contained in the contracts. The Company was required to consider
whether the hybrid contracts embodied a beneficial conversion feature (“BCF”). The calculation of the effective conversion
amount resulted in a BCF because the fair value of the conversion was greater than the Company’s stock price on the date of issuance
and a BCF was recorded in the amount of $ 20,000
and accordingly the amount of $ 20,000
was credited to Additional Paid in Capital. The
BCF which represents debt discount was accreted over the life of the loan using the effective interest rate. Interest expense
for the nine months ended March 31, 2022 and 2021 was $ 248
and $ 717 ,
respectively. As
of September 30, 2021, each note holder had agreed to entered into a cancellation and release agreement to provide conclusive
evidence of the cancellation, settlement and full and final mutual release with respect to all and any rights, obligations and disputes
among the Parties arising under the Secured Note. There was no outstanding interest payable nor outstanding secured promissory
note. The cancellation of convertible promissory notes and the cancellation of interest payable were recorded as a gain on the statements
of operations and comprehensive income (loss). The principal amount of $ 20,000 ,
plus accumulated interest of $ 11,840 ,
were forgiven. LEGACY
VENTURES INTERNATIONAL, INC. NOTES
TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS (Expressed
in US dollars) (Unaudited) |
