NOTE 7 – CONVERTIBLE NOTES PAYABLE

The carrying value of convertible notes payable, net of discount at June 30, 2026, and 2025, was as follows:

Between July 2025 and June 2026, the Company issued multiple convertible notes payable with a coupon rate of 10% and a maturity date of one year. The Notes are convertible at a fixed price of $0.01 per share. There are 83,750,000 warrants outstanding in connection with these convertible notes. These warrants have an exercise price of $0.01 per share and have a three-year expiration date. The convertible notes issued during the year ended June 30, 2026, contain a provision that prevents the Company from prepaying any principal or interest on the notes.

During the year ended June 30, 2026, $177,500 in principal and $17,750 in accrued interest was converted into 19,525,000 shares of common stock.

During the years ended June 30, 2026 and 2025, the Company recorded $42,283 and $42,608 in interest expense related to these notes, respectively. As of June 30, 2026, and 2025, the balance of accrued interest related to these loans was $25,783 and $7,008, respectively. Accrued interest is included in the accounts payable and accrued liabilities section of the consolidated balance sheets.

The Company evaluated the detachable warrants under the requirements of ASC 480 and concluded that the warrants do not fall within the scope of ASC 480. The Company next evaluated the notes under the requirements of ASC 815 “Derivatives and Hedging” and concluded the warrants meet equity classification. The warrants issued were valued using Black-Scholes Merton (“BSM”) and were determined to have an aggregate value of $460,506.

Significant inputs and results arising from the BSM process are as follows for the redemption feature component of the warrants: