Notes Payable

6 Months Ended

Dec. 31, 2018

Notes 4 - Notes Payable:

Long Term Notes Payable

The Company's long term notes payable obligations to unrelated parties are as follows as of December 31, 2018 and June 30, 2018:


	December 31, 2018	June 30, 2018
Note payable to a bank. The note bears interest at 3.10% and matures in June 2019. The note is guaranteed by a stockholder and collateralized by a certificate of deposit owned by a related party. In May 2018, 50,000 shares of stock were issued to the related party in exchange for a $100,000 reduction in the short-term note balance.	$ 275,497	$ 275,000

Note payable to an individual executed March 2018 assumed in acquisition (Note 11) in which the note accrues interest on the original principal balance at a rate of 6.25% annually. Interest is paid annually with principal due March 2021.	75,000	75,000
Mortgage payable assumed in acquisition; interest payable at 4.75%, and monthly payments of $34,435 through December 31, 2016. The note payable was modified during the year ended December 31, 2017. After the modification, the interest rate was lowered to 2.5% annually with monthly payment of $15,223 through July 15, 2020, and a balloon payment at maturity. The mortgage payable is secured by the building and land as well as guarantees by related parties. (Note 11)	4,493,570	4,512,710
Note payable to a financial institution for acquisition of vehicle with monthly installments required of $153 maturing June 2022.	5,385	6,150

Capital leases with a related party for 3 delivery vehicles with monthly installments from $253 to $461, including 4% to 4.75% interest, maturing over 5-year terms expiring between April 2019 and July 2020.	10,514	17,668
Total Non-Related Party Notes Payable	4,859,966	4,886,528
Current Portion of Non-Related Party Notes Payable	282,728	362,181
Long-term Portion of Non-Related Party Notes Payable	$ 4,577,238	$ 4,524,347

Future minimum principal payments on the non-related party long term notes payable are as follows:


	Period ending December 31,
	2019	$ 282,728
	2020	4,498,481
	2021	78,488
	2022	269
		$ 4,859,966

Short Term Notes Payable

The Company's short term notes payable obligations to unrelated parties assumed in the acquisition (Note 11) are as follows as of December 31, 2018 and June 30, 2018:


	December 31, 2018	June 30, 2018
Note payable to individual and bears interest at a rate of 8% interest annually and is due on demand.	$ 20,000	$ 20,000

Note payable to individual and bears interest at a rate of 8% interest annually and is due on demand.	10,000	10,000

Note payable to an individual in which the note accrues interest on the original principal balance at a rate of 6.25% interest annually and due on demand.	60,000	60,000

Note payable to an individual in which the note accrues interest on the original principal balance at a rate of 6.25% interest annually and was scheduled to mature in August 2018. The term was extended for another year.	25,000	25,000
Note payable to an individual in which the note accrues interest on the original principal balance at a rate of 6.25% interest annually and is due on demand.	25,000	25,0000


Note payable to an individual in which the note accrues interest on the original principal balance at a rate of 10% interest annually and is due on demand.	5,000	25,000

Total Short Term Non-Related Party Notes Payable	$ 145,000	$ 165,000

Convertible Note Payable

On November 30, 2018, the Company signed a convertible promissory note with an investment firm. The $400,000 note was issued at a discount of $40,000 and bears interest at 5% per year. The loan

principal and interest are convertible into shares of common stock at the lower of (a) 70% of the lowest traded price of the common stock during the 20 trading days immediately preceding the notice of conversion or (b) $3 per share, beginning in May 2019. The note matures in August 2019. The note has prepayment penalties ranging from 110% to 125% of the principal and interest outstanding if repaid within 60 to 180 days from issuance. During the three and six month periods ended December 31, 2018, the Company recorded interest expense of $1,666 and $4,444 of amortization of debt discount, included in interest expense. As of December 31, 2018, the outstanding principal balance of the note is $400,000, with an unamortized debt discount of $35,556. The Company plans to pay the note in full prior to May 2019 through additional sources of financing.