Secured Convertible Promissory Notes | 10) SECURED CONVERTIBLE PROMISSORY NOTES FISCAL YEAR END APRIL 30, 2018 During the year ended April 30, 2018, the Company issued several Convertible Promissory Notes (the “2018 Convertible Notes”), repayable two years after the issuance. The 2018 Convertible Notes are secured against all assets of the Company, repayable two years after the issuance, bearing simple interest rate of 10% during the term of the notes and simple interest rate of 2% after the due date. The 2018 Convertible Notes were convertible at any time after the original issuance date into a number of shares of the Company’s common stock, determined by dividing the amount to be converted by a weighted average conversion price of $0.10 per share. During the year ended April 30, 2018, $60,000 of the Convertible Notes were reclassified from non-related party at to related party as a debt holder became a director of the Company. The Company determined that the conversion option of several 2018 Convertible Notes were subject to a beneficial conversion feature and during the year ended April 30, 2018 the company recorded a total beneficial conversion feature of $1,027,441, and amortization of the beneficial conversion feature of $550,382 as interest expense. During the twelve months ended April 30, 2018 the Company issued Convertible Notes for cash proceeds of $1,212,849, settled accounts payable from previous years of $17,436, service debt provided by related parties of $131,577, and service debt provided by non-related parties of $182,696 of which $66,600 was finders’ fee and legal fees for cash based Convertible Notes recorded as discount to the Convertible Notes. $40,071 of the $66,600 debt discount was amortized during the twelve months ended April 30, 2018. As of April 30, 2018, the Company has outstanding senior secured convertible promissory notes of $142,762 (net of unamortized discount of $54,816) issued to related parties and $997,468 (net of unamortized discount of $523,658) issued to non-related parties. Firstfire Note Inclusive of the 2018 Convertible Note activity, on April 12, 2018, the Company issued a Convertible Note to Firstfire Global Opportunities Fund, LLC (the “Firstfire Note”) in the amount of $162,000, of which $150,000 of the actual amount was received in cash proceeds by the company and the remaining $12,000 was recognized as an Original Issuance Discount, to be amortized over the life of the note. The Firstfire Note was repayable nine months after issuance, bearing simple interest of 2% during the term of the note and simple interest rate of 15% after the due date. The holder of the Firstfire Note had the right, on or after the 180 th FISCAL YEAR END APRIL 30, 2019 Non-related parties During the year ended April 30, 2019, the Company issued several Convertible Promissory Notes (the “2019 Convertible Notes, non-related parties”), repayable two years after the issuance. The 2019 Convertible Notes are secured against all assets of the Company, repayable two years after the issuance, bearing simple interest rate of 10% during the term of the notes and simple interest rate of 20% after the due date. The 2019 Convertible Notes were convertible at any time after the original issuance date into a number of shares of the Company’s common stock, determined by dividing the amount to be converted by a weighted average conversion price of $0.10 per share. The Company determined that the conversion option of several 2019 Convertible Notes were subject to a beneficial conversion feature and during the year ended April 30, 2019 the company recorded a total beneficial conversion feature of $13,793, and amortization of the beneficial conversion feature of $662,834 as interest expense. During the year ended April 30, 2019 the Company issued in aggregate Convertible Notes for cash proceeds of $363,575, settled accounts payable from previous years of $7,490 and issued convertible notes for services in lieu of cash payment of $11,867. The Company repaid $92,000 of convertible notes, related party during the year ended April 30, 2019. Inclusive of the 2019 Convertible Notes, non-related parties, on November 30, 2018, the Company issued a Convertible Note to Labrys Fund LP (the “Labrys Note”) in the amount of $220,000, of which $198,000 of the actual amount was received in cash proceeds by the company and the remaining $22,000 was recognized as an Original Issuance Discount, to be amortized over the life of the note. The Labrys Note is due on May 30, 2019 and bears simple interest of 12% per annum. Proceeds from the Labrys Note paid the remaining balance of the Firstfire Note. The Labrys Note allows the holder to convert outstanding debt to shares of the Company’s common stock at a price other than a fixed conversion price per share. The conversion price of the Labrys Note is 60% of the lowest traded price of the Company’s common stock during the twenty consecutive trading day period immediately preceding any conversion notice. Management has determined that these provisions cause the conversion options to require derivative liability accounting. In connection with Labrys Note, the Company also issued 2,000,000 shares of common stock (the “Returnable Shares”) to the holder as a commitment fee, provided however, the Returnable Shares must be returned to the Company’s treasury if the Note is fully repaid prior to 180 days after the issuance date. Subsequent to year end, the Company issued to related parties, two secured promissory notes in the amounts of $150,000 and $75,000, respectively. The Company used $220,000 of the proceeds from the notes to pay the outstanding balance of the Labrys Note. On June 5, 2019, Labrys returned 2,000,000 shares of common stock as the Labrys Note was repaid prior to 180 days of issuance. Related parties During the year ended April 30, 2019, $275,000 of the Convertible Notes were reclassified from non-related party at to related party as management determined the certain debt holders held significant familial relationships so as to be considered related parties by definition. During the year ended April 30, 2019, the Company issued Convertible Notes to related parties totaling $185,932 at and interest rate of 10%, with the exclusion of one note issued at 12%. For the year ended April 30, 2019, cash proceeds from the issuance of Convertible Notes, related parties were $105,000. The company issued convertible notes to related parties in the amounts of $27, 932 for services in lieu of cash payment, $47,400 in settlement of accounts payable and $5,600 of accrued interest. At April 30, 2019, principal payments on the convertible debentures are due as follows: Related party Non-related Total Year ending April 30, 2020 $ 231,151 $ 1,016,276 $ 1,247,427 Year ending April 30, 2021 213,932 207,682 421,614 TOTAL CONVERTIBLE NOTES $ 445,083 $ 1,223,958 $ 1,669,041 As of April 30, 2018, REGI had outstanding senior secured convertible promissory notes (the “Convertible Notes”) of $142,762 (net of unamortized discount of $54,816) issued to related parties and $997,468 (net of unamortized discount of $523,658) issued to non-related parties. As of April 30, 2019, the Company has outstanding senior secured convertible promissory notes of $413,693 (net of unamortized discount of $31,390) issued to related parties and $1,089,712 (net of unamortized discount of $134,246) issued to non-related parties. The aggregate principal and accrued interest balance due to convertible note holders, non-related parties as of April 30, 2019 is $1,376,374 which is convertible at any time after the original issue date into a number of shares of the Company’s common stock, determined by dividing the amount to be converted by a weighted average conversion price of $0.071 per share, or an aggregate of 19,518,439 shares of the Company’s common stock. The aggregate debenture and accrued interest balance due to convertible note holders, non-related parties as of April 30, 2018 was $1,324,799 at a weighted average conversion price of $0.10, or an aggregate of 13,167,649 shares of the Company’s common stock. The aggregate notes and accrued interest balance due to convertible note holders, related parties as of April 30, 2019 is $494,839. The aggregate balance is convertible at any time after the original issue date into a number of shares of the Company’s common stock, determined by dividing the amount to be converted by a weighted average conversion price of $0.084 per share, or an aggregate of 5,881,314 shares of the Company’s common stock. As of April 30, 2018, the aggregate convertible notes, related parties plus accrued interest was $488,377 and was convertible to an aggregate of 6,336,522 shares of the Company’s common stock based on a weighted average conversion price of $0.077 per share. The Company analyzed the conversion option in the notes for derivative accounting treatment under ASC Topic 815, “Derivatives and Hedging,” and determined that the instrument does not qualify for derivative accounting except as disclosed on the Firstfire Note and the Labrys Note. |