CONVERTIBLE DEBENTURES |
6 Months Ended |
|---|---|
Dec. 31, 2025 | |
| CONVERTIBLE DEBENTURES | |
| CONVERTIBLE DEBENTURES | NOTE 5 — CONVERTIBLE DEBENTURES
On July 1, 2024, the Board of Directors authorized a private placement offering to accredited investors of unsecured 9% convertible debentures with a twenty-four month maturity in the aggregate principal amount of up to $5,000,000 (the “Debentures”). The Debentures are convertible into shares of the Company’s common stock at the lower of $0.75 per share or 20% below the average volume weighted average price per share of common stock for the ten trading days prior to the date of conversion, subject to a minimum conversion price of $0.50 per share. The Debentures bear interest at 9% per annum, compounded on the basis of a 365-day year and actual days elapsed, due at maturity, have a maturity date of two years from the date of issuance, are convertible at the option of the holder, and are subject to certain lock-up and leak-out provisions.
The Company issued $480,000 aggregate principal amount of Debentures during the year ended June 30, 2025 and an additional $50,000 during the Transition Period. As of December 31, 2025 and June 30, 2025, $530,000 and $480,000 aggregate principal amount of Debentures were outstanding, respectively. As of December 31, 2025, $265,000 of principal, representing Debentures issued during the six months ended December 31, 2024 and maturing during the second half of 2026, was classified as a current liability, and $265,000 of principal maturing during the first half of 2027 was classified as long-term.
Interest expense on the Debentures was $24,070 for the six months ended December 31, 2025, $6,341 for the six months ended December 31, 2024 (unaudited), $21,392 for the year ended June 30, 2025, and $0 for the year ended June 30, 2024. Accrued and unpaid interest on the Debentures was $45,462 and $21,392 as of December 31, 2025 and June 30, 2025, respectively, of which $30,000 and $0, respectively, was classified as a current liability.
The Company evaluated the Debentures under ASC 470-20 and ASC 815 and determined that the embedded conversion feature does not require bifurcation and that no beneficial conversion feature was required to be recognized. |