Note 5. Convertible Notes Payable

Convertible notes payable consisted of the following at June 30, 2018 and September 30, 2017:

	June 30, 2018			September 30, 2017
Convertible note dated April 13, 2017 in the original principal amount of $20,000, no stated maturity date, bearing interest at 3% per year, convertible into common stock at a rate of $0.01 per share	$	20,000		$	20,000
Convertible note dated December 11, 2017 in the original principal amount of $68,000, maturing September 20, 2018, bearing interest at 12% per year, convertible beginning June 11, 2018 into common stock at a rate of 65% of the average of the two lowest trading prices during the 15 trading days prior to conversion. During the three months ended June 30, 2018, principal in the amount of $53,000 was converted to 6,043,439 shares of common stock.		15,000			-
Convertible note dated February 14, 2018 in the original principal amount of $35,000, maturing November 30, 2018, bearing interest at 12% per year, convertible beginning August 13, 2018 into common stock at a rate of 65% of the average of the two lowest trading prices during the 15 trading days prior to conversion		35,000			-
Convertible note dated May 14, 2018 in the original principal amount of $58,000, maturing February 28, 2019, bearing interest at 12% per year, convertible beginning November 14, 2018 into common stock at a rate of 65% of the average of the two lowest trading prices during the 15 trading days prior to conversion		58,000			-
Convertible note dated June 25, 2018 in the original principal amount of $43,000, maturing April 15, 2019, bearing interest at 12% per year, convertible beginning December 25, 2018 into common stock at a rate of 65% of the average of the two lowest trading prices during the 15 trading days prior to conversion		43,000			-
Total current convertible notes payable		171,000			20,000

Less: discount on convertible notes payable		(40,265	)		—
Total convertible notes payable, net of discount	$	130,735		$	20,000

All principal along with accrued interest is payable on the maturity date. The notes are convertible into common stock at the option of the holder. The holder of the notes cannot convert the notes into shares of common stock if that conversion would result in the holder owning more than 4.9% of the outstanding stock of the Company.

As of June 30, 2018 and September 30, 2017, accrued interest on notes payable was $226,557 and $160,255, respectively.

During the nine months ended June 30, 2018 and 2017, interest expense on the notes payable was $7,963 and $97,590, respectively.

Conversions of Notes Payable to Common Stock

During the nine months ended June 30, 2018, the holders of the Convertible Note Payable dated June 30, 2015 elected to convert principal of $0 into 6,000,000 shares of common stock. A loss of $328,200 was recognized on the conversions as they occurred after all debt had been fully converted as of September 30, 2017. This is recorded under additional paid in capital.

Also during the nine months ended June 30, 2018, the holders of the Convertible Note Payable dated December 11, 2017, elected to convert principal of $53,000 into 6,043,439 shares of common stock. The Company recorded a loss of $8,046 on this transaction.