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RELATED PARTY TRANSACTIONS

6 Months Ended

Dec. 31, 2018

5.	RELATED PARTY TRANSACTIONS

Effective December 1, 2016, the Company entered into a $250,000 Commercial Note Line of Credit (which we refer to as the “Line of Credit”) with a stockholder and officer of the Company to evidence prior indebtedness and provide for future borrowings. The advances are used to fund our operations. The Line of Credit accrues interest at 5% per annum and matures on March 31, 2019. At maturity, or in connection with a pre-payment, subject to the conditions set forth in the Line of Credit, the stockholder has the right to convert the amount outstanding (or the amount of the prepayment) into the Company’s Series A Preferred Stock at the par value of $1,000 per share. At December 31, 2018 and June 30, 2018, the principal balance totaled $0 and $22,674, respectively.

This same stockholder and officer also holds $29,250 of 5% convertible notes, which mature in December 2020 and are convertible into common stock at a rate of $0.015 per share or 1,950,000 shares.

In fiscal year 2018, certain stockholders of the Company made $77,000 in advances to the Company, which is still outstanding as of December 31, 2018. In the three month period ended December 31, 2018, the Company agreed to issue 15.4 million shares of the Company’s common stock (cost of $19,250) in lieu of any interest, past or present, related to these advances.

All of the above liabilities are included in Due to Related Parties in the accompanying consolidated balance sheet as of December 31, 2018.

Beginning in the quarter ended March 31, 2017, certain members of management agreed to forego management fees in consideration of the operating cash flow needs of the Company. There is not a set timeline to reinstitute such management fees. As of December 31, 2018 and June 30, 2018, $60,000 in such fees remain unpaid and are recorded in accounts payable and accrued liabilities in the accompanying balance sheets.