Convertible Notes | 8. Convertible Notes As of June 30, 2019 and June 30, 2018, the balance owing on convertible notes, net of debt discount, with terms as described below was $1,046,909 and $2,399,941, respectively. Convertible notes issued prior to the year ended June 30, 2017 were as follows: Convertible note 1: On August 24, 2012, the Company entered into a convertible promissory note with an accredited investor for $25,000. The note has a term of six (6) months with an interest rate of 10% and is convertible to common shares at a 25% discount of the average of 30 days prior to the conversion date. As of June 30, 2019, the note is in default. Convertible note 2: On September 18, 2012, the Company entered into a convertible promissory note with an accredited investor for $25,000. The note has a term of six (6) months with an interest rate of 10% and is convertible to common shares at a 25% discount of the average of 30 days prior to the conversion date. As of June 30, 2019, the note is in default. Convertible note 3: On December 21, 2012, the Company entered into a convertible promissory note with an accredited investor for $100,000. The note has a term of six (6) months with an interest rate of 10% and is convertible to common shares at a 25% discount of the average of 30 days prior to the conversion date. As of June 30, 2019, the note is in default. Convertible note 4: On December 19, 2016, the Company entered into a convertible promissory note with an accredited investor for $20,000. The note has a term of six (6) months with an interest rate of 8% and is convertible to common shares at a 40% discount. As of June 30, 2019, the note has been fully converted. Convertible note 5: On January 17, 2017, the Company entered into a convertible promissory note with an accredited investor for $25,000. The note has a term of six (6) months with an interest rate of 8% and is convertible to common shares at a 40% discount to the then current market price of our shares. As of June 30, 2019, the note has been fully converted. Convertible note 6: On January 20, 2017, the Company entered into a convertible promissory note with an accredited investor for $80,000. The note has a term of six (6) months with an interest rate of 8% and is convertible to common shares at a 40% discount to the then current market price of our shares. As of June 30, 2019, the note has been fully converted. Convertible note 7: On February 8, 2017, the Company entered into a convertible promissory note with an accredited investor for $50,000. The note has a term of six (6) months with an interest rate of 8% and is convertible to common shares at a 40% discount to the then current market price of our shares. As of June 30, 2019, the note has been fully converted. Convertible note 8: On February 24, 2017, the Company entered into a convertible promissory note with an accredited investor for $66,023. The note has a term of six (6) months with an interest rate of 8% and is convertible to common shares at a 40% discount to the then current market price of our shares. As of June 30, 2019, the note has been fully converted. Convertible note 9: On February 9, 2017, the Company entered into a convertible promissory note with an accredited investor for $50,000. The note has a term of six (6) months with an interest rate of 8% and is convertible to common shares at a 40% discount to the then current market price of our shares. As of June 30, 2019, the note has been fully converted. Convertible note 10: On February 28, 2017, the Company entered into a convertible promissory note with an accredited investor for $75,000. The note has a term of six (6) months with an interest rate of 8% and is convertible to common shares at a 40% discount. As of June 30, 2019, the note has been fully converted. Convertible note 11: On March 1, 2017, the Company entered into a convertible promissory note with an accredited investor for $100,000. The note has been purchased by other investor in total amount of $156,067 with a term of nine (9) months with an interest rate of 10% and is convertible to common shares at a 45% discount to the then current market price of our shares. As of June 30, 2019, the Company converted $63,567 and the remaining balance of note was $60,751. Convertible note 12: On March 23, 2017, the Company entered into a convertible promissory note with an accredited investor for $70,000. The note has a term of six (6) months with an interest rate of 8% and is convertible to common shares at a 40% discount to the then current market price of our shares. As of June 30, 2019, the note has been fully converted. Convertible note 13: On February 16, 2017, the Company entered into a convertible promissory note with an accredited investor for $30,000. The note has a term of six (6) months with an interest rate of 8% and is convertible to common shares at a 40% discount to the then current market price of our shares. As of June 30, 2019, the note has been fully converted. Convertible note 14: On March 31, 2017, the Company entered into a convertible promissory note with an accredited investor for $200,000. The note has a term of six (6) months with an interest rate of 8% and is convertible to common shares at a 40% discount to the then current market price of our shares. As of June 30, 2019, the note has been fully converted. Convertible note 15 & 16: On May 17, 2017, the Company entered a convertible promissory note with an investor for a total amount of $1,375,000 (after $10,000 legal and due diligence fee) with an OID of $125,000, the note will be fulfilled through a series of funding. The note is due 12 months after each funding date and bears an interest rate of 10%. The conversion price for the note is 55% of the lowest closing bid for the 20 consecutive trading days prior to the conversion date. In connection with the note, the investor will also receive warrants and is calculated based on 15% of the maturity amount. The warrants have a life of four years with exercise price of $0.15 per share and have cashless exercise option. The Company had outstanding balance of $921,004 as of the year ended June 30, 2018. The fair value of the warrants was $40,400 as of June 30, 2018. During the year ended June 30, 2019, the principal balance has been fully converted, the remaining default charge balance of the note was $250,000 as of June 30, 2019 and the fair value of the warrant liability was $5,555. As of June 30, 2019, the note is in default and bears a default interest rate of 22% per annum. Convertible notes issued during the year ended June 30, 2018 were as follows: Convertible note 17: On July 17, 2017, the Company entered into a convertible promissory note with an accredited investor for $164,900. The note has a term of one year with an interest rate of 8% and is convertible to common shares at a fixed conversion price of $0.025. As of June 30, 2019, the note has been fully converted. Convertible note 18: On August 3, 2017, the Company entered into a convertible promissory note with an accredited investor for $150,000. The note has a term of six (6) months with an interest rate of 10% and is convertible to common shares at a 45% discount to average of 3 lowest trading price during last 20 trading days. As of June 30, 2019, the note has been fully converted. Convertible note 19: On August 22, 2017, the Company entered into a convertible promissory note with an accredited investor for $35,000. The note has a term of six (6) months with an interest rate of 8% and is convertible to common shares at a 40% discount of average two lowest price of last 20 trading days prices. As of June 30, 2019, the note has been fully converted. Convertible note 20: On September 15, 2017, the Company entered into a convertible promissory note with an accredited investor for $150,000. The note has a term of six (6) months with an interest rate of 10% and is convertible to common shares at a 45% discount to average of 3 lowest trading price during last 20 trading days. As of June 30, 2019, the note has been fully converted. Convertible note 21: On September 26, 2017, the Company entered into a convertible promissory note with an accredited investor for $15,000. The note has a term of six (6) months with an interest rate of 8% and is convertible to common shares at a 40% discount of average two lowest price of last 20 trading days prices. As of June 30, 2019, the note has been fully converted. Convertible note 22: On December 7, 2017, the Company entered into a convertible promissory note with an accredited investor for $50,000. The note has a term of one year with an interest rate of 8% and is convertible to common shares at a fixed conversion price of $0.05. As of June 30, 2019, the note has been fully converted. Convertible notes issued during the year ended June 30, 2019 were as follows: Convertible note 23: On September 20, 2018, the Company entered a convertible promissory note with an accredited investor for a total amount of $267,500 (includes $5,000 legal fee and an OID of $12,500). The note is due 360 days and bears an interest rate of 8%. The conversion price for the note is 55% of the lowest closing bid for the 20 consecutive trading days prior to the conversion date. During the year ended June 30, 2019, the principal balance of 205,000 has been converted into the Company’s common stock, and the remaining balance of the note was $62,500 as of June 30, 2019. Convertible note 24: On October 5, 2018, the Company entered a convertible promissory note with an accredited investor for a total amount of $250,000 (includes $5,000 OID). The note is due 360 days and bears an interest rate of 8%. The conversion price for the note is 45% of average three lowest closing bid for the 20 consecutive trading days prior to the conversion date. As of June 30, 2019, the note has been fully converted. Convertible note 25: On November 1, 2018, the Company entered into a convertible promissory note with an accredited investor for $100,000. The note has a term of one year with an interest rate of 8% and is convertible to common shares at a fixed conversion price of $0.07. Convertible note 26: On November 16, 2018, the Company entered into a convertible promissory note with an accredited investor for $80,000. The note has a term of one year with an interest rate of 8% and is convertible to common shares at a fixed conversion price of $0.07. Convertible note 27: On November 16, 2018, the Company entered into a convertible promissory note with an accredited investor for $40,000. The note has a term of one year with an interest rate of 8% and is convertible to common shares at a fixed conversion price of $0.07. Convertible note 28: On December 3, 2018, the Company entered into a convertible promissory note with an accredited investor for $35,000. The note has a term of one year with an interest rate of 8% and is convertible to common shares at a fixed conversion price of $0.07. Convertible note 29: On December 26, 2018, the Company entered a convertible promissory note with an accredited investor for a total amount of $250,000 (includes $5,000 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 45% of average three lowest closing bid for the 20 consecutive trading days prior to the conversion date. During the year ended June 30, 2019, the principal balance of 100,000 has been converted into the Company’s common stock, and the remaining balance of the note was $150,000 as of June 30, 2019. Convertible note 30: On January 8, 2019, the Company entered a convertible promissory note with an accredited investor for a total amount of $105,000. The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 35% of average two lowest closing bid for the 20 consecutive trading days prior to the conversion date. Convertible note 31: On January 22, 2019, the Company entered a convertible promissory note with an accredited investor for a total amount of $100,000. The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 42% of average three lowest closing bid for the 20 consecutive trading days prior to the conversion date. Convertible note 32: On January 24, 2019, the Company entered a convertible promissory note with an accredited investor for a total amount of $53,000. The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 35% of average two lowest closing bid for the 20 consecutive trading days prior to the conversion date. Convertible note 33: On February 26, 2019, the Company entered a convertible promissory note with an accredited investor for a total amount of $100,000. The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 42% of average three lowest closing bid for the 20 consecutive trading days prior to the conversion date. Convertible note 34: On March 4, 2019, the Company entered a convertible promissory note with an accredited investor for a total amount of $250,000 (includes $7,000 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 58% of average two lowest closing bid for the 20 consecutive trading days prior to the conversion date. Convertible note 35: On April 2, 2019, the Company entered a convertible promissory note with an accredited investor for a total amount of $100,000 (includes $2,000 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 40% of average three lowest closing bid for the 10 consecutive trading days prior to the conversion date. Convertible note 36: On April 4, 2019, the Company entered a convertible promissory note with an accredited investor for a total amount of $100,000 (includes $2,000 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 58% of average two lowest closing bid for the 20 consecutive trading days prior to the conversion date. Convertible note 37: On May 2, 2019, the Company entered a convertible promissory note with an accredited investor for a total amount of $125,000 (includes $2,000 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 40% of average three lowest closing bid for the 10 consecutive trading days prior to the conversion date. Convertible note 38: On May 7, 2019, the Company entered a convertible promissory note with an accredited investor for a total amount of $125,000 (includes $2,500 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 58% of average two lowest closing bid for the 20 consecutive trading days prior to the conversion date. Convertible note 39: On May 29, 2019, the Company entered a convertible promissory note with an accredited investor for a total amount of $125,000 (includes $2,000 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 40% of average three lowest closing bid for the 10 consecutive trading days prior to the conversion date. Convertible note 40: On June 12, 2019, the Company entered a convertible promissory note with an accredited investor for a total amount of $125,000 (includes $2,500 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 58% of average two lowest closing bid for the 20 consecutive trading days prior to the conversion date. As of the year ended June 30, 2019, the Company’s convertible notes consisted of following: Balance at 06.30.2018 Addition/(Repayment) Conversion in principal # of Shares Issued Balance at 6.30.2019 Due Date Interest Rate Conversion Terms $ 25,000.00 $ — $ — — $ 25,000.00 2/24/2013 14 % 75% of the average of 30 days prior to the conversion date. 25,000 — — — 25,000 3/18/2013 14 % 75% of the average of 30 days prior to the conversion date. 100,000 — — — 100,000 6/21/2013 14 % 75% of the average of 30 days prior to the conversion date. 20,000 — 20,000 1,160,391 — 7/17/2017 10 % 40% discount of average price of last 20 trading days prices 25,000 — 25,000 1,426,674 — 7/17/2017 8 % 40% discount of average two lowest price of last 20 trading days prices 50,000 — 50,000 2,931,188 — 8/8/2017 8 % 40% discount of average two lowest price of last 20 trading days prices 80,000 — 80,000 4,530,846 — 7/20/2017 8 % 40% discount of average two lowest price of last 20 trading days prices 66,023 — 66,023 3,712,324 — 8/24/2017 8 % 40% discount of average two lowest price of last 20 trading days prices 50,000 — 50,000 2,390,805 — 8/9/2017 8 % 40% discount of average two lowest price of last 20 trading days prices 75,000 — 75,000 4,378,547 — 7/31/2017 8 % 40% discount of average two lowest price of last 20 trading days prices 124,318 — 63,567 3,919,404 60,751 12/1/2017 10 % 45% discount of lowest price of last 20 trading days prices 70,000 — 70,000 4,067,072 — 9/23/2017 8 % 40% discount of average two lowest price of last 20 trading days prices 30,000 — 30,000 1,500,010 — 8/16/2017 8 % Greater of 40% discount to average of 3 lowest trading price during last 20 trading days or $.05 200,000 — 200,000 11,557,652 — 9/30/2017 8 % 40% discount of average two lowest price of last 20 trading days prices 921,004 — 671,004 31,483,740 250,000 5/12/2018 22 % 45% discount of lowest price of last 20 trading days prices 150,000 — 150,000 3,745,330 — 5/3/2018 10 % 45% discount to average of 3 lowest trading price during last 20 trading days 150,000 — 150,000 3,744,005 — 6/15/2018 10 % 42% discount to average of 3 lowest trading price during last 20 trading days 164,900 — 164,900 6,596,000 — 7/17/2018 8 % The conversion price shall be $0.025 per share 35,000 — 35,000 691,184 — 8/22/2018 8 % 40% discount of average two lowest price of last 20 trading days prices 15,000 — 15,000 294,114 — 9/26/2018 8 % 40% discount of average two lowest price of last 20 trading days prices 50,000 — 50,000 1,000,000 — 12/7/2018 8 % The conversion price shall be $0.05 per share — 267,500 205,000 10,785,299 62,500 9/15/2019 8 % 55% discount of lowest price of last 20 trading days prices — 250,000 250,000 13,453,675 — 10/5/2019 8 % 45% discount of average three lowest price of last 20 trading days prices — 100,000 — 100,000 10/31/2019 8 % The conversion price shall be $0.07 per share — 80,000 — 80,000 11/15/2019 8 % The conversion price shall be $0.07 per share — 40,000 — 40,000 11/15/2019 8 % The conversion price shall be $0.07 per share — 35,000 — 35,000 12/2/2019 8 % The conversion price shall be $0.07 per share — 250,000 100,000 7,964,002 150,000 12/26/2019 8 % 45% discount of average three lowest price of last 20 trading days prices — 105,000 — 105,000 1/8/2020 8 % 35% discount to average of 2 lowest trading price during last 20 trading days — 100,000 — 100,000 1/22/2020 8 % 42% discount to average of 3 lowest trading price during last 20 trading days — 53,000 — 53,000 1/24/2020 8 % 35% discount to average of 2 lowest trading price during last 20 trading days — 100,000 — 100,000 2/26/2020 8 % 42% discount to average of 3 lowest trading price during last 20 trading days — 250,000 — 250,000 3/4/2020 8 % 58% discount to average 2 lowest trading prices during 20 days prior conversion date — 100,000 — 100,000 4/2/2020 8 % 40% discount to average 3 lowest trading prices during 10 days prior conversion date — 100,000 — 100,000 4/4/2020 8 % 58% discount to average 2 lowest trading prices during 20 days prior conversion date — 125,000 — 125,000 5/2/2020 8 % 40% discount to average 3 lowest trading prices during 10 days prior conversion date — 125,000 — 125,000 5/7/2020 8 % 58% discount to average 2 lowest trading prices during 20 days prior conversion date — 125,000 — 125,000 5/29/2020 8 % 40% discount to average 3 lowest trading prices during 10 days prior conversion date — 125,000 — 125,000 6/12/2020 8 % 58% discount to average 2 lowest trading prices during 20 days prior conversion date $ 2,426,245 $ 2,330,500 $ 2,520,494 $ 121,332,262 $ 2,236,251 As of the year ended June 30, 2019, the Company’s debt discount consisted of following: Date of Due Date Related Debt Discount Amortization in 06/30/2018 Debt Discount Balance 06/30/18 Total Amortization in 06/30/2019 Debt Discount Balance 06/30/2019 8/22/2017 8/22/2018 $ 35,000 $ 29,918 $ 5,082 $ 5,082 $ — 9/26/2017 9/26/2018 $ 15,000 $ 11,384 $ 3,616 $ 3,616 $ — 7/17/2017 7/17/2018 $ 164,900 $ 160,445 $ 4,455 $ 4,455 $ — 12/7/2017 12/7/2018 $ 30,000 $ 16,849 $ 13,151 $ 13,151 $ — 9/20/2018 9/15/2019 $ 12,500 $ — $ — $ 9,826 $ 2,674 9/20/2018 9/15/2019 $ 250,000 $ — $ — $ 196,528 $ 53,472 10/5/2018 10/5/2019 $ 5,000 $ — $ — $ 5,000 $ — 10/5/2018 10/5/2019 $ 245,000 $ — $ — $ 245,000 $ — 11/1/2018 11/1/2019 $ 84,286 $ — $ — $ 55,652 $ 28,634 11/16/2018 11/16/2019 $ 36,571 $ — $ — $ 22,644 $ 13,927 11/16/2018 11/16/2019 $ 18,286 $ — $ — $ 11,322 $ 6,964 12/3/2018 12/3/2019 $ 10,000 $ — $ — $ 5,726 $ 4,274 12/26/2018 12/26/2019 $ 5,000 $ — $ — $ 2,548 $ 2,452 12/26/2018 12/26/2019 $ 245,000 $ — $ — $ 124,849 $ 120,151 1/8/2019 1/8/2020 $ 0 $ — $ — $ 43,653 $ 48,448 1/22/2019 1/22/2020 $ 0 $ — $ — $ 38,107 $ 49,371 1/22/2019 1/22/2020 $ 2,000 $ — $ — $ 871 $ 1,129 1/24/2019 1/24/2020 $ 0 $ — $ — $ 20,402 $ 27,030 2/26/2019 2/26/2020 $ 0 $ — $ — $ 32,854 $ 63,854 2/26/2019 2/26/2020 $ 2,000 $ — $ — $ 679 $ 1,321 3/4/2019 3/4/2020 $ 243,000 $ — $ — $ 78,344 $ 164,656 3/4/2019 3/4/2020 $ 7,000 $ — $ — $ 2,257 $ 4,743 4/2/2019 4/2/2020 $ 98,000 $ — $ — $ 23,831 $ 74,169 4/2/2019 4/2/2020 $ 2,000 $ — $ — $ 486 $ 1,514 4/4/2019 4/4/2020 $ 98,000 $ — $ — $ 23,295 $ 74,705 4/4/2019 4/4/2020 $ 2,000 $ — $ — $ 475 $ 1,525 5/2/2019 5/2/2020 $ 123,000 $ — $ — $ 19,828 $ 103,172 5/2/2019 5/2/2020 $ 2,000 $ — $ — $ 322 $ 1,678 5/7/2019 5/7/2020 $ 122,500 $ — $ — $ 18,074 $ 104,426 5/7/2019 5/7/2020 $ 2,500 $ — $ — $ 369 $ 2,131 5/29/2019 5/29/2020 $ 123,000 $ — $ — $ 10,754 $ 112,246 5/29/2019 5/29/2020 $ 2,000 $ — $ — $ 175 $ 1,825 6/12/2019 6/12/2020 $ 122,500 $ — $ — $ 6,025 $ 116,475 6/12/2019 6/12/2020 $ 2,500 $ — $ — $ 123 $ 2,377 Total: $ 218,597 $ 26,303 $ 1,026,324 $ 1,189,341 |