| ACCRUED INTEREST PAYABLE |
NOTE 6: ACCRUED INTEREST PAYABLE Changes in accrued interest payable during the years ended June 30, 2026 and 2025 are as follows: | | 2026 | | | 2025 | | Accrued interest payable beginning | | $ | 418,044 | | | $ | 540,116 | | Interest expense accrued on notes payable | | | 316,477 | | | | 396,230 | | Payments of accrued interest | | | (121,793 | ) | | | (48,679 | ) | Conversion of accrued interest into common stock | | | (181,798 | ) | | | (108,064 | ) | Accrued interest extinguished — statute of limitations (Note 9) | | | - | | | | (361,559 | ) | Accrued interest forgiven in connection with cash settlement of promissory notes (Note 9) | | | (26,584 | ) | | | - | | Accrued interest separately forgiven in connection with Series D exchanges | | | (279,230 | ) | | | - | | Accrued interest payable ending | | $ | 125,116 | | | $ | 418,044 | |
In connection with the April 2026 exchange of promissory-note and convertible-note principal for Series D Convertible Preferred Stock (see Note 7), the exchanging noteholders separately forgave $279,230 of related accrued interest. The forgiven interest was not consideration for the Series D shares and was recognized as a gain on extinguishment of debt (see Note 9), as summarized below: Series D shares issued for principal / advances (not interest consideration) | | Shares Issued | | | Gain from Extinguishment of Accrued Interest Payable | | Promissory-note principal; related accrued interest separately forgiven | | | 1,014,000 | | | $ | 254,975 | | Convertible-note principal; related accrued interest separately forgiven | | | 67,500 | | | | 24,255 | | Subtotal — principal exchanges; related accrued interest separately forgiven | | | 1,081,500 | | | | 279,230 | | Amounts due to an officer and two former directors | | | 363,359 | | | | - | | Total Series D shares issued | | | 1,444,859 | | | $ | 279,230 | |
Interest expense for year ended June 30, 2026 and 2025 was comprised of the following: | | 2026 | | | 2025 | | Interest expense | | $ | 344,489 | | | $ | 396,230 | | Amortization of debt discount | | | 420,524 | | | | 67,194 | | Total interest expense | | $ | 765,013 | | | $ | 463,424 | |
Interest expense of $344,489 for the year ended June 30, 2026 includes $316,477 of interest on notes payable and convertible notes payable (see the roll-forward above) and $28,012 of other interest expense, including interest on credit card balances, which is expensed as incurred.
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