CONVERTIBLE NOTES PAYABLE

9 Months Ended

Mar. 31, 2024

CONVERTIBLE NOTES PAYABLE

CONVERTIBLE NOTES PAYABLE

NOTE 8 – CONVERTIBLE NOTES PAYABLE

The carrying value of convertible notes payable, net of discount at March 31, 2024 and June 30, 2023 was as follows:

	March 31,			June 30,
Convertible Notes Payable	2024			2023
Convertible notes payable (10% interest)	$	1,640,000		$	100,000
Less unamortized discount		(64,090	)		-
Total face value	$	1,575,910		$	100,000

Between May 13, 2023 and March 28, 2024, the Company issued convertible bridge loans with an aggregate face value of $1,480,000. The notes have 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. In connection with the Notes, holders of $150,000 in principal were issued 15,000,000 warrants. These warrants have an exercise price of $0.01 per share and have a three year expiration date.  During the nine months ended March 31, 2024 and 2023, the Company recorded $50,855 and $3,258 in interest expense related to these notes, respectively. During the three months ended March 31, 2024 and 2023, the Company recorded $22,943 and $3,258 in interest expense related to these notes, respectively.

As mentioned in Note 7, the Company marked up convertible bridge loans from their aggregate fair value of $249,702 to their face value of $270,000 and reclassified within the condensed consolidated balance sheets under convertible notes payable. During the nine months ended March 31, 2024 and 2023, the Company recorded $19,055 and $0 in interest expense related to these notes, respectively. During the three months ended March 31, 2024 and 2023, the Company recorded $5,620 and $0 in interest expense related to these notes, respectively.

During the nine months ended March 31, 2024, $110,000 in principal and $11,000 in accrued interest was converted into 12,100,000 shares of common stock.

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 were valued using Black-Scholes Merton (“BSM”) and were determined to have a value of $66,660.