CONVERTIBLE NOTES PAYABLE |
12 Months Ended |
|---|---|
Jun. 30, 2022 | |
| CONVERTIBLE NOTES PAYABLE | |
| 7. CONVERTIBLE NOTES PAYABLE | 7. CONVERTIBLE NOTES PAYABLE
As of June 30, 2021, all convertible notes payable had been fully converted and the obligations extinguished. All related derivative liabilities were settled.
On July 6, 2020, the Company entered into a convertible promissory note with JSJ Investments Inc. (“JSJ”) in the principal amount of $77,000. The note matures on July 6, 2021, and bears interest at 8%. A debt discount $44,617 was recorded, including a derivative liability of $42,617. JSJ has the right beginning on the date that is 31 days following the date of the note to convert principal and accrued interest into shares of the Company’s common stock. The conversion price is 70% of the average of the three lowest trading prices of the Company’s common stock during the fifteen trading days ending on the latest complete trading day prior to the date of conversion. During the year ended June 30, 2021, JSJ converted the entire principal of $77,000, accrued interest payable of $3,122 and conversion fees of $300 into common shares of the Company, extinguishing the debt in full. As of June 30, 2021, the debt discount had been amortized in full to interest expense.
On August 4, 2020, the Company entered into a Securities Purchase Agreement with Eagle Equities, LLC (“Eagle”), providing for the issuance and sale by the Company and the purchase by Eagle of a 6% convertible note of the Company (the “Note”) in the aggregate principal amount of $1,086,957. The Note provided for an 8% original issue discount (“OID”) such that the aggregate purchase price for Note will be $1,000,000. The Note was to be purchased by Eagle in various tranches on defined closing dates.
The first closing date under the Note was held on August 4, 2020, when the Company sold, and the Buyer purchased the first tranche under the Note for a $271,739 portion of the aggregate $1,086,957, resulting in proceeds to the Company of $250,000 and reflecting the OID of 8%. A subsequent closing of a second tranche of $271,739 portion of the Note was to occur on the filing of the Company’s resale registration statement under the Securities Act of 1933, as amended, covering the entire principal amount of the Note. Eagle retained the right to purchase the unfunded balance of the Note through February 4, 2022, provided that each purchase must be in an amount of not less than $108,696 ($100,000 after the OID).
On October 22, 2020, the Company closed the second tranche of the Note after the Company filing the required Form S-1 registration statement. The second tranche was for $271,739, with proceeds to the Company of $250,000 net of the original issue discount.
The Note was to mature on February 4, 2022 and bore interest at 6%. Eagle had the right at any time to convert principal and accrued interest into shares of the Company’s common stock. The conversion price was 70% of the lowest closing bid price of the Company’s common stock during the fifteen trading days ending on the latest complete trading day prior to the date of conversion.
A debt discount $139,943 was recorded for the first tranche, including a derivative liability of $112,204. During the year ended June 30, 2021, Eagle converted the entire principal of the first tranche of $271,739 and accrued interest payable of $4,155 into common shares of the Company, extinguishing the debt in full. As of June 30, 2021, the debt discount had been amortized in full to interest expense.
A debt discount $131,378 was recorded for the second tranche, including a derivative liability of $103,639. During the year ended June 30, 2021, Eagle converted the entire principal of the second tranche of $271,739 and accrued interest payable of $8,877 into common shares of the Company, extinguishing the debt in full. As of June 30, 2021, the debt discount had been amortized in full to interest expense. |